Ethereum [ETH] likely to face a wall of sellers at $1700 – Can the bulls prevail?

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion

• Buying pressure saw ETH surge to the doorstep of a major resistance yet again
• Buyers can wait for a breakout, while short sellers could be swimming against the tide

The V-shaped reversal of Ethereum on the price charts on Monday rewarded buyers handsomely, but it has not formed any consolidation on the way up. This is not a problem in itself, but it seemed to present some uncertainty for buyers looking to enter the market.

Read Ethereum’s [ETH] Price Prediction 2023-24

The large swathes of imbalances to the south might get tagged before another leg upward. On the other hand, the price could shoot past $1700 this week. Which scenario can a buyer look to profit from, and how?

Violent reversal saw ETH nearly scrape the range highs once more

Source: ETH/USDT on TradingView

The strong buying pressure meant that the fall beneath the range low at $1500 was invalidated within the space of three days. Generally, the sharp fall beneath the range (yellow) and a subsequent retest of the lows would be a selling opportunity. However, the OBV showed there was heavy buying volume over the weekend and Monday.

This saw Ethereum burst past the $1500 and $1600-levels, pausing for a few hours in the $1600 zone. This seemed to be the mid-range mark. To the north, the $1700-1750 zone will likely pose resistance to the prices.

Hence, any ETH buyers can look to book profits around this area and wait for a breakout and retest before buying. Short sellers would be selling against the trend and might take on extra risk if they’re not cautious with position size.

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The RSI and the OBV both showed strong bullishness. The RSI was well above neutral 50 and this could begin an uptrend, provided $1700 is broken. Once the $1750-area is flipped to support, the next higher timeframe resistance lay at $2000.

In case of a retracement, buyers can be on the lookout for a break in structure on lower timeframes such as H4 to exit their trades and limit their losses.

MVRV ratio leaps higher but selling pressure might not have ended

Source: Santiment

The 30-day MVRV ratio picked itself up from its 3-month lows and was back in positive territory once more, at press time. This suggested short-term holders were in profit. However, the 180-day dormant circulation metric saw a large spike on 12 March.

The mean coin age of Ethereum has also been in decline since mid-February. This was a sign of greater token movement between addresses. It also seemed to be a sign that the distribution phase after the run upward in January is still not over.