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Why Ethereum bulls should be cautious

2min Read

Despite what the indicators say, if Ethereum was truly bullish, the breakout to $2000 has no business reversing back into the previous range formation.

Why Ethereum bulls should be cautious
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Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

  • The Ethereum bulls were unable to establish a rally after sellers forced a large correction.
  • The higher timeframes support a bullish thesis but the price could take another tumble in the coming days.

Ethereum [ETH] saw huge volatility last weekend. On Monday, 10 July, ETH was trading at $1850. In the early hours of Friday, ETH was priced at $1993 and plummeted swiftly just a few hours thereafter.


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


The longer-term bias of Ethereum remained bullish. Yet, on the lower timeframe charts, the breakout past the three-week range (marked in yellow) from $1840-$1930 was almost fully retraced. This did not bode well for the buyers.

If it looks like a breakout and has volume like a breakout then it is probably…not a breakout?

Ethereum bulls have reason to be cautious, here's why

Source: ETH/USDT on TradingView

The market structure of Ethereum was bullish on the 4-hour chart. As mentioned earlier, the price action on the daily chart also favors the bulls. The CMF showed significant capital flow directed into the market, and the OBV has also noted gains in recent days.

The RSI has fallen back to the neutral 50 mark but could revive soon. Despite what the indicators say, if ETH was truly bullish, the breakout to $2000 has no business reversing back into the previous range formation.

The weekend saw volatility and trading volume decline, but prices below $1950 showed that bulls lacked conviction and bears are far stronger than it appears. Hence, traders can wait for a drop below $1895-$1915 to take short trades. Alternatively, a move back above $1950 would begin to show bullish intent but buyers must exercise caution.


How much are 1, 10, or 100 ETH worth today?


The Open Interest flattened as speculators went to the sidelines over the weekend

Ethereum bulls have reason to be cautious, here's why

Source: Coinalyze

Some weekends see heightened volatility as the low volume on the order books means pushing prices around is easier for whales. This weekend, the price action hovered in the $1925-$1945 region, which were 1% apart.

The lack of a strong trend meant speculators in the futures market did not commit much capital, and the Open Interest remained flat. It experienced a sharp drop previously as Ethereum retraced its breakout. The spot CVD was in a downtrend, which showed seller dominance in the short term. The funding rates remained positive.

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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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