The Federal Reserve announced, as expected, that it would maintain its key policy rate as outlined in its economic summary. Ethereum’s price seemed to respond positively to this news and remained above $1,600. Still, Ethereum failed to maintain trading above $1,600 in recent hours and fell below the Fibonacci level due to reduced currency outflows. Moreover, a massive sell-off among whales has increased bearish pressure on the price chart.
Liquidated $11 million worth of long positions
Over the past few hours, ETH price has fallen heavily below the crucial $1,600 mark, triggering a wave of selling activity among investors. Coinglass reports that a massive $11 million in long positions were wiped out in just a few hours.
This liquidation signals increased selling pressure, especially as ETH struggled near its resistance at around $1,620. For those new to the concept, long liquidation refers to traders who expected a price increase and had to close their positions, usually at a short, because the price did not move as they predicted.
Glassnode indicates that Ethereum outflows have reached a one-month low at 6709 ETH, indicating a growing foreign exchange reserve. A decrease in outflows implies that more Ethereum remains on the exchanges, while less ETH is removed. This increase in foreign exchange reserves indicates higher availability of Ethereum for sale, which is generally seen as a bearish indicator.
Additionally, the ether-to-bitcoin ratio fell to a fourteen-month low as major token holders, including Ethereum’s co-founder Vitalik Buterin, transferred coins to exchanges, potentially signaling intent to sell.
Currently, the ETH-BTC ratio is approaching 0.05957, according to data from TradingView, which is the lowest point since July last year. However, a positive funding rate indicates that a majority of traders are bullish on Ethereum, expecting the price to rise from the bottom.
What’s next for the ETH price?
Recently, bulls failed to hold the ETH price above the crucial USD 1,600 level as the altcoin faced a heavy sell-off near the USD 1,620 high. As a result, ETH price fell below the crucial Fib channels, reaching a low of almost $1,570. At the time of writing, ETH price is trading at $1,587, down over 2.7% from yesterday’s price.
The extended wick on the candlestick pattern indicates that buyers are defending a further decline. The falling 20-day EMA at $1,624 and the RSI approaching overselling territory indicate bearish upside. However, bulls will likely try to send the price above the 20-day EMA.
If Ether rises above $1,623, it could give the bulls an edge. This could potentially push the ETH price towards $1,674. However, if the price falls below $1,531, it would imply that the bears are still in play, potentially driving the price down even further.