Ethereum Traders Gear Up For a Slip Below $2,600

Ethereum enjoyed a notable price increase during the first half of the week, surging from 2,510 to $2,695 on Monday.

The asset continued its uptrend as predicted, breaking above its four-month high at $2,789 and peaking at $2,827. The surge inspired traders to bet on further upside movement as demand for short-dated options calls reached new levels.

Other data revealed massive expectations of a rise to $3k. Some traders expressed positive opinions about the coin’s next price mark. However, trading action on Wednesday changed this speculation. ETH retraced from $2,880 to a low of $2,743 and closed with slight losses despite attempts at buyback.

Ethereum continued its downtrend at the time of writing as selling pressure increased. A sweep through X reveals that investors remain optimistic about the next price action. However, fundamentals do not favor this expectation.

The crypto market saw a massive decline across several assets on Thursday due to some bearish rhetoric. The DXY dropped to its lowest point in the last three years. Its correlation with interest rates reduces the likelihood of a rate cut by the Federal Reserve. Investors anticipated a slash since the first quarter. However, the latest event suggests that this expectation may not be fulfilled soon.

Nonetheless, some traders remain optimistic amid the latest trend. Reports from Glassnodes stated that ETH futures open interest hit a new all-time high. OI exceeds $20 billion despite the latest decline. Data from CryptoQuant explains that a rise in stablecoins may be responsible for the milestone. It coincides with TRON’s milestone of processing $700 billion in stables.

Buying Action Resumes Amid Selloff

Traders may be switching to long-term strategies as they anticipate further increases. Exchange inflows are significantly lower than outflows despite the rise in selling pressure. This trend is also responsible for the massive decline in exchange reserves over the last 24 hours.

Data from DeFiLlama supports claims of a switch in traders’ strategy as it reveals a spike in the total locked value. However, the DEX volume remains the same over the last 48 hours.

The derivatives market is negative at the time of writing. Open interest dropped by over 7% in the last 24 hours, as funding rates also saw a similar decline. Long positions were the biggest losers during this period. They lost over $94 million, as liquidated short positions totaled $48 million.

The spot market remains largely bearish as the Coinbase and Korea premium index are negative, indicating massive selling pressure. 

Ethereum Risks Descent to $2,600

Several indicators on the one-day chart print sell signals at the time of writing. The average directional index was rising for two days as Ethereum saw massive upside movement. However, it halted its uptrend and will start downhill movement if the downtrend continues.

The relative increases the odds of this happening as the metric dips further. It is at 58 in response to the latest increase in selling pressure. The reading coincided with the MACD’s 12 EMA as it slipped lower.

Previous price movement suggests that Ethereum will see a further decline in the coming day, and a retest of the $2,600 support is inevitable. A slip below this critical mark will see the largest altcoin retrace to $2,480.

The post Ethereum Traders Gear Up For a Slip Below $2,600 appeared first on Cointab.