Ethereum’s price experienced a significant drop yesterday following weeks of steady growth, causing investors to question the sustainability of the recent positive market sentiment and speculate whether a bearish trend is imminent.
The Daily Chart:
On the daily chart, ETH has been on a steady upward trend, except for a recent plunge of almost 9%. Although it has yet to reach the $2200 resistance level, ETH has been well defended by bears at the $2000 psychological mark. The RSI indicator also predicts a possible reversal, signaling an overbought market.
ETH may find support in the $1800 level and 50-day moving average, which are currently around the same price range. If the bullish trend continues and the $2000 and $2200 levels are broken, a rally towards the $3000 resistance zone is likely.
The 4-Hour Chart:
On the 4-hour chart, ETH’s price has broken below a large ascending channel. The minor $1930 resistance level is currently holding the market, as the price retests the broken lower boundary of the channel. If the price climbs back inside the channel, a bullish trend may continue, but if the trendline rejects the price, a drop towards at least the $1800 support area is likely. Despite multiple support levels, the bulls may still push ETH higher and continue its upward trend.
Ethereum Open Interest
The Exchange Outflow (Mean) metric chart indicates the average number of coins withdrawn per transaction from exchanges. Higher values imply that investors are withdrawing more coins per transaction, indicating a decrease in selling pressure.
The chart reveals a considerable surge in the metric when Ethereum’s price spiked and reached the critical $2.1K price zone, suggesting a shift towards bullishness as investors accumulate Ethereum during its upward trend. However, it is important to note that price corrections are always possible, and it is advisable to manage risks and avoid entering the market because of FOMO (fear of missing out).