Key Insights
- Ethereum has suffered under bearish influence since losing the $4,100 zone in mid-December last year.
- This bearish influence became worse after Ethereum lost the $3,500 zone later in the month.
- Still, funding rates and open interest remain steady for Ethereum, showing that investors are still interested.
- A falling wedge formation on the 4-hour chart will likely lead to an up-shoot towards $4,000 for Ethereum if it maintains the ongoing bullish momentum.
Ethereum has left investors in suspense for months, especially with its trading beneath the $4,000 zone and its reluctance to cross over $3,500.
After experiencing a harsh correction along with the rest of the market between Sunday and Monday, there might be some indications that a recovery is on the way.
Here is a detailed look at Ethereum in the current market, how it has performed recently, and what to expect from the cryptocurrency in the future.
How Has Ethereum Performed?
Ethereum is currently bullish today, and rose by around 4% between Monday and Tuesday this week.
The cryptocurrency is still slightly bearish on its weekly timeframe, but is maintaining its $381 billion market cap regardless.
CoinMarketCap data also shows that the cryptocurrency is facing a 31% decline in its trading volumes, which indicates that investors aren’t moving money around on the Ethereum network, as they did the previous day.
Overall, Ethereum appears to be tracking the general crypto market’s bullishness, and should continue ascending if another flash dip doesn’t occur.
Macro Price Update
Ethereum has been in a downward trend since hitting a high of $4,107 on 16 December last year.
The recent loss of the $3,500 zone later on at the end of the month, then turned this level into a new resisatance zone.
The cryptocurrency has been sent into a decline recently, and is now dangerously close to the $3,000 zone (which is where the 200-day EMA sits).
This convergence of a psychological resistance and an important moving average therefore means that Ethereum could be stable above the $3,000 zone.
At the same time, it also means that more decline could follow if Ethereum loses this zone.
Ethereum On Lower timeframes
Ethereum’s price action seems promising on the shorter timeframe, as indicated by the falling wedge formation on the 4-hour chart.
This formation is a highly bullish one, and could lead to an Ethereum “send towards the upside” if the bulls keep things up.
It is also worth noting that the bullishness of this formation is a medium-term phenomenon, and that Ethereum is still prone to general market flash-dips.
However, if Ethereum takes advantage of any general bullish market movement and establishes a break towards the upside of this formation, it could more than likely trigger a rally towards $4,000.
What the Futures Market Says
The futures market is another source of sentiment analysis.
According to data from Coinglass, the cryptocurrency’s funding rate—which measures how much money investors are putting into ETH derivatives, has remained steady lately—even despite the price declines.
This metric has been on the low side for months, and indicates a low level of participation from said investors.
However, it means that a massive opportunity is sitting on top of the cryptocurrency, and if the spot demand for ETH increases (even via the ETF market), Ethereum could gain enough momentum to turn things around.
On the flipside, Open Interest has been relatively high, and indicates that despite the weakness in price that Ethereum is experiencing, investors are refusing to close their leveraged positions.
This indicates that the vast majority of investors are still holding out hope on a sudden and powerful Ethereum upswing towards the upside.
