This is how low ETH can go after a recent 4% drop: Ethereum price analysis

In recent market developments, ethereum showed a notable rally, reaching a yearly high of $2,717.

However, this rise was met with considerable selling pressure, causing a slight pullback and setting the stage for a possible near-term consolidation correction.

By shayan

ethereum Price Analysis: The Daily Chart

A close examination of ethereum's daily chart reveals a significant recent rise, with the price reaching a yearly high of $2.7K. At the same time, eth has emerged within an upward expanding wedge pattern, identifiable by the orange lines. This pattern has the potential for a bearish reversal, depending on the price breaking below the lower boundary.

Despite this, after ethereum's notable upward move, the price found a fundamental resistance zone, in particular: the static $2.7K level that aligns with the upper boundary of the rising wedge pattern.

This caused a slight setback. Taking into account recent market sentiment and price action, a continuation of the correction leg is anticipated, possibly resulting in a retracement to the multi-month rising wedge pattern (green lines), coinciding with the lower boundary of the recent short-term expansion. cradle.

The 4 hour chart

Analyzing the 4-hour chart, the price faced considerable selling pressure following the impulsive rise, initiating a correction phase. Consequently, ethereum appears confined within a crucial range, capped by substantial support at $2.4K and notable resistance at $2.7K, resulting in mild downward consolidation.

Currently, the price has approached the lower limit of this significant range. Notably, the lower boundary aligns with a significant support region, defined by the price range between the 0.5 ($2,408) and 0.618 ($2,335) Fibonacci retracement levels. Therefore, this offers solid price support.

Given the potential presence of buyers within this critical support zone, an expected scenario is for the price to find support, which will facilitate a renewed bullish move. However, in the event of a bearish breakout, sellers can target the multi-week ascending trend line as their next target.

By shayan

Funding rates are critical in analyzing ethereum futures market sentiment, as illustrated in the accompanying chart. This metric serves as a fundamental indicator to discern whether buyers or sellers are executing their orders with greater aggression.

The chart prominently reveals an upward trajectory in the funding rates metric, reflecting the sharp rise in prices. This alignment indicates a pronounced bullish sentiment prevailing in the market. However, it is crucial to note that elevated values ​​in funding rates raise concerns about a possible state of overheating in perpetual markets, indicating the possibility of an imminent long-term tightening event.

Following a recent short-term correction, a noteworthy development is the substantial decline in funding rates. This drop means that the overall sentiment remains bullish, which at the same time indicates a cooling in perpetual markets from their previously overheated state. Consequently, there is a possibility that the price will resume its upward trajectory once the ongoing correction stage is completed.

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