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?
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
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.
