Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- The price action of Ethereum was at odds with a volume indicator.
- ETH bulls can wait for a retracement but must trade a breakout carefully.
Bitcoin [BTC] saw its bullish momentum stall just beneath the $30.8k level over the past ten days. This has affected the king of altcoins, Ethereum [ETH] as well. USDT (Tether) Dominance hovered around 7.2% in this period.
Read Ethereum’s [ETH] Price Prediction 2023-24
Taken together, it showed indecisiveness in the past week. This could also be a build-up to an explosive move upward. ETH traders must be prepared for both scenarios, but the bullish one was more likely according to the price action.
Trying to long ETH before a breakout could see traders’ positions chopped up
Source: ETH/USDT on TradingView
The 2-hour chart showed that Ethereum had a bullish market structure. The prices have ventured as high as $1948 before retreating, a region that was previously tested back in the first week of May. Therefore, it is a sign that bulls were dominant.
Yet, the OBV has trended downward over the past week, showing a lack of buying pressure. The RSI also began to sink toward neutral 50 over the past 48 hours as the bulls began to falter. The DMI showed a lack of a strong trend, with the ADX (yellow) below the 20 mark.
The Fibonacci retracement levels were plotted based on the move upward that followed the bullish market structure break. The 50% retracement level at $1895 presented a juicy target for ETH traders, with the $1880 mark also being a lower timeframe significant level. Hence, traders must exercise caution trading the lower timeframe charts.
A breakout past the $1930 level and its retest as support in the coming days could be a sign of bullish intent. However, a liquidity hunt before a retracement back toward $1880 could also occur, which means breakout traders must manage their position size carefully and be ready to cut losses in case of a drop beneath $1910.
The spot CVD was in agreement with the OBV
Source: Coinalyze
While Ethereum prices saw a massive surge from $1830 to $1948, the spot CVD trended lower on the chart. Coinalyze data showed that the Open Interest had leapt up alongside prices, but slumped over the past 12 hours. This could be due to the weekend as well as the lowered volatility behind ETH.
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The funding rates remained positive, showing the overall bias was bullish.
However, this does not discount the possibility of a deep retracement toward $1880 or lower. Hence, lower timeframe traders can look to use Monday’s high and low to form an idea for the upcoming week.