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Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- Ethereum has a bearish market structure on the lower time frames.
- Short sellers looking for a drop below $1600 could find themselves in a bear trap in the short term in the event of a rebound towards the $1650 region.
Ethereum [ETH] saw a price drop on September 10 due to the compromise of Vitalik Buterin’s account. The altcoin’s price action lacked a clear trend over the past month, although there were periods of increased volatility on a handful of days.
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Ethereum bulls have battled in the $1600-$1650 region but have regained none of the territory they lost in the previous months. This was worrying. Bitcoin [BTC] also traded in a long-term support zone, but a drop below $24.8k could accelerate losses for ETH.
Due to the lack of volatility, ETH established a short-term range
Source: ETH/USDT on TradingView
In September, ETH traded between $1602 and $1670. It has a technical interest of $1626 (orange dotted). To the south, the $1550 and $1370 are the next high support levels to watch out for. While they may not be able to stop a strong downtrend, they were places where the chances of a reversal were high.
Therefore, traders and investors will be interested in these locations on the price chart. The lower time frame charts, such as the 4-hour chart and below, showed strong bearish momentum behind Ethereum. Furthermore, the selling pressure highlighted by the OBV began to take control on September 9 and could reverse the small gains the bulls made last week.
A drop below $1600 could be a liquidity chase and result in a short-term rise towards $1650, which could fool short sellers waiting for a clean breakdown. Scalp traders can take advantage of these conditions, but risk-averse market participants can also wait for better opportunities.
The weighted sentiment drops into the negative zone as the price action remains bearish
Source: Santiment
Santiment’s data showed a spike in age-related consumption earlier this month, but has remained quiet since then. This suggested that there has not been a wave of selling activity from large long-term holders in recent days.
Realistic or not, here is the market cap of ETH in terms of BTC
Market sentiment was negative and the average coin age decreased. Together they highlighted the bearishness in the market and that ETH was likely not in an accumulation phase.
The currency flow balance saw a large outflow of ETH on August 23, but not many significant outflows since then.