Ethereum (ETH) has been on a steady decline since April. The intense selling momentum scared all market players, with ETH long-investors who have held for more than a year deciding to sell. Which patch is Ethereum likely to take on its price charts.
USDT has had its dominance metric falling since May 12. It plunged from 6.75% to 6.05% at this publication. That shows that individuals that held Tether deployed their funds. Market players who had joined stablecoins are now entering the crypto space again. That shows the fear that dominated the past couple of weeks could have eased.
Ethereum 1Day Timeframe
Late sessions in March broke the bearish market structure, and Ethereum highlighted a possible bullish reaction. Nevertheless, early April weeks saw Ethereum on a decline beneath the $3,000 value area, confirming bear strength. Furthermore, intensified bearishness saw Ethereum breaking beneath the $2,200 and $2.500 lows (January & February) over the recent weeks.
The value area between $1,750 and $1,950 represents a demand area where Ethereum launched a massive rally in July & August last year. Nevertheless, the altcoin is yet to trigger upticks from the level. While publishing this blog, ETH traded at $1,918.68, losing more than 3% within the past day.
Meanwhile, a bullish engulfing candlestick would signal massive buying. An action beyond $2,150 wouldn’t necessarily mean long-term bullishness but a potential $2,350 revisit before another downward move.
Reasoning
The Relative Strength Index stayed beneath the 50 neutral, showing progressing bearish trends. Nevertheless, the indicator made higher lows over the last couple of days. And that might lead to a bullish divergence whenever ETH plunges beneath $1,890.
The Directional Movement Index confirmed bearishness for ETH, with the ADX and –DI staying beyond the 20-level. The Chaikin Money Flow remained well beneath -0.05 over the recent weeks and affirmed massive capital flowing out of the marketplace. The on-balance volume agreed with the bearish narrative as it recorded an enormous drop in May.
Final Thought
A decline beneath $1,900 might trigger a bullish divergence on ETH daily chart. That plus the demand zone at high timeframes, the alt could see a rebound towards $2,000 before exploring $2,200. Nevertheless, buyers should stay cautious amidst declines beneath $1,800. That might catalyze another selling wave in the coming week.