Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- The market structure and momentum were bearish.
- A revisit to $1560 was likely but the bears could seize the upper hand afterward.
Bitcoin [BTC] bulls were able to keep BTC from falling beneath the $21.6k mark. Any slip toward $21.4k was quickly bought up. Buyers can be cautiously optimistic, for the price is at a good risk-to-reward area to bid.
Read Ethereum’s [ETH] Price Prediction 2023-24
Similarly, Ethereum [ETH] also had some reasons to be bullish on. However, the price strayed dangerously close to the last line of defense before a plunge to $1350. The lower timeframe momentum strongly favored the sellers- but can a reversal occur?
The market structure was firmly bearish, but bulls have some hope
Source: ETH/USDT on TradingView
It was not a pretty sight for ETH bulls on the price charts. The $1565 support from late January 2023 was cleanly broken a few days ago, flipping the structure to bearish. Alongside the price, the OBV and the RSI also embarked on a downtrend. This highlighted the bearish momentum and stiff selling pressure Ethereum saw over the past week.
During Ethereum’s rally past $1300 in mid-January, the price left a fair value gap on the 12-hour chart. This area extended from $1464 to $1508. On 13 February, ETH had dropped to $1462 before bouncing higher. Hence, this imbalance has been filled. Will the prices rebound and surge higher?
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It must be remembered that the market structure break on the 12-hour and daily timeframes at $1565 was a strong one. Hence, while ETH could bounce back to that area, it is likely that another move from there would commence. Therefore, instead of trading the possible bounce, traders can look for entries to a short position around the $1550-$1580 area.
The reasons to be bullish on ETH are the combination of the FVG being filled, and BTC at $21.6k. While both the assets do not always move together, the recent selling pressure has primed the market for further losses. Hence, a drive upward will likely catch a majority off guard.
Open Interest falls alongside prices to underline bearish sentiment
Source: Coinalyze
Both the OI and the spot CVD of Ethereum on the one-hour chart have been in freefall over the past few days until press time. Falling OI and prices pointed toward exhausted bulls, and showed sentiment was bearish. Liquidated long positions over the past week also showed bulls getting slaughtered.
With a bearish structure, momentum and rising selling pressure, short sellers can get a good opportunity soon. A BTC break below $21.2k would likely see ETH nosedive toward the $1300 mark as well.