Ethereum Faces Pressure on $2,700. Here’s How It Will Playout

Ethereum surged to a high of $2,617 on Wednesday but retraced as selling pressure increased. The altcoin has since retraced, slipping $2,500.

A closer look at the one-day chart shows that the largest altcoin failed to surge as the rest of the market did. On Tuesday, it registered a slight upside movement after it dipped to a low of $2,444. It recovered and closed with a doji.

The trend is repeating on Wednesday with a significant downward movement. It is experiencing notable pressure on the $2,400 support. It may only be a matter of time before it flips. However, why is ETH failing to surge?

Exchanges Are Seeing Significant Inflows

Data from CryptoQuant paints several bearish pictures. Exchange inflows are increasing, surging higher than the previous day. Influx outweighs outflows, indicating the coin struggles with a notable bearish sentiment.

An analysis for CryptocurrenciestoWatch shows that the actions of an Ethereum co-founder may have worsened investors’ confidence in the asset. Jeffrey Wilcke transferred 105,737 ETH to Kraken. The transaction quickly garnered attention, raising speculation among traders. However, onchain data showed that he did not sell as he moved the assets to 12 different addresses afterward.

The derivative market is significantly bearish as open interest drops over 3%. The funding rate is dipping, as over 42k long positions were liquidated in the last 24 hours. Nonetheless, short position traders lost over $82k.

Investors remain notably negative on ETH as short positions increase. The Fund Market Premium decreased by over 13%, while the Korea and Coinbase premium remained negative.

It’s worth noting that ETFs are picking up amid the bearish trend across Ethereum. The ETH exchange-traded fund registered an inflow exceeding $64 million, the highest this month.

Ethereum Surges

Ethereum broke out a few hours ago as the crypto market celebrated Pizza Day. The bullish sentiment across the sector spurred more buying pressure and further price increases. As a result, the largest altcoin attempted the $2,700 mark. It failed to break the mark due to strong rejections at $2,692. 

ETH trades at $2,662 at the time of writing, slightly below its peak. Nonetheless, it remains above the third pivot resistance, a positive trend. The moving average convergence divergence suggests that the uptrend may continue. 

The metric was close to displaying a bearish divergence during the previous intraday session but reverted following the current-day surge. It is worth noting that the 50-day moving average continues its upward climb and edges closer to the 200-day MA.

Other on-chain metrics have since flipped positive. The taker buy-sell ratio is above one, indicating bullish dominance. Open interest increased by over 6% as funding rates spiked.

What Next?

Recent readings from indicators show that the largest altcoin may see further price increases in the coming days. The bullish sentiment may continue, causing it to break above $2,800 this week. The bollinger bands support this claim, showing room for more uptrend. 

Nonetheless, the relative strength index is at 73, indicating ETH is overbought and due for corrections. It trades above the 61% fib level. Previous price movement hints at the bulls defending this mark as they did in February. A slip below this mark may send the cryptocurrency to $2,400. 

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