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Ethereum: The different ways ETH’s price action can play out on the charts

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Disclaimer: The findings of this analysis are the sole opinions of the writer and should not be considered investment advice.

Bitcoin fell below the $39k area in the past few days as fears over inflation and invasion grew. In late January and early February, the short-term market structure flipped bullishly- but a crucial level of resistance was not tested as Ethereum slumped on the charts once more. A recent report highlighted how the perception that the Ethereum network’s powerhouse is the Defi sector could actually be inaccurate.

ETH- 12H

Ethereum couldn't hold on to the $2900 area, can bulls save the next support level?

Source: ETH/USDT on TradingView

The short-term bullish bias in early February did not have enough steam to push the price past the $3200 area. The previous lower high was marked on the chart in orange at $3411 and the bears forced a rejection at the 50% Fibonacci retracement level. These retracement levels were plotted based on ETH’s move from $1706 to $4868.

Therefore, the longer-term market structure remained unbroken, with demand nowhere to be seen in recent days when the price crashed beneath the $2800 mark as well. This could see $2200, $2000, or even the $1700 levels revisited. At which point the 27.2% extension level south might come into the conversation.

However, the USDT dominance (Tether dominance, its measure of market capitalization relative to the whole crypto market) stood at 4.79%- a 5.2% value marked the $29.4k and $1700 bottom for BTC and ETH respectively.

Rationale

Ethereum couldn't hold on to the $2900 area, can bulls save the next support level?

Source: ETH/USDT on TradingView

The RSI fell below neutral 50 once again on the 12-hour timeframe, in response to the selling pressure recently. A divergence was not spotted. The AO also fell below the zero line. Both momentum indicators have had a bearish leaning since early November, with only early February showing bullishness that was quickly expunged.

The OBV has also seen a drop, and a level was marked on the indicator- a drop on the OBV below this level could see selling pressure intensify.

Conclusion

While there was a tiny indication that the bottom could be around the corner, the market structure and momentum remained bearish. It remains to be seen whether the $2362 level can hold as support, while a retest of the $2800-$2900 could be a selling opportunity.

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Akashnath S is a Senior Journalist and Technical Analysis expert at AMBCrypto. He specializes in dissecting price action, identifying key market trends through advanced chart patterns, and forecasting both short-term and long-term asset trajectories. His distinct analytical method is grounded in his academic training as a Chemical Engineer. This background provides him with a systematic, process-oriented approach to market data, enabling him to analyze the complex dynamics of financial markets with precision and objectivity. Having actively covered the cryptocurrency space since the landmark 2017 market cycle, Akashnath possesses years of experience navigating both bull and bear markets. This seasoned perspective is critical to his insightful reporting on market volatility and evolution. As an active market participant, Akashnath enhances his analysis with crucial, hands-on experience. This practical application of his technical skills ensures his insights are not merely theoretical, but are also relevant and actionable for an audience looking to understand and navigate trading opportunities. He is dedicated to educating readers on the nuances of technical analysis, empowering them with the knowledge to make more informed financial decisions.
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