ethereum price has hit a substantial hurdle after a significant rise last week.
The market is currently correcting and traders are wondering if a reversal is on the horizon.
Technical analysis
ethereum Price Analysis: The Daily Chart
On the daily chart, the price has been very bullish during the last quarter of 2023, rising by over $1,000. Recently, eth has seen an aggressive rally towards the $2,700 resistance zone. However, this level has decisively rejected the price and a correction towards the $2,400 area has begun.
Meanwhile, the relative strength index is still showing values above 50%, indicating that the momentum remains bullish and the price is likely to continue its uptrend once the correction is made.
The 4 hour chart
Looking at the 4-hour chart, it is clear that eth price has formed a double top pattern at the $2,700 resistance level. The relative strength index also indicated that the asset is overbought in this period.
Currently, the price is forming lower highs and lower lows, potentially targeting the $2,400 level in the near term. However, this level seems likely to sustain the price and start a bounce towards the $2,700 level afterwards as the overall market structure remains bullish.
Analysis of feelings
ethereum Open Interest
While ethereum price continues its bullish trend, some worrying signs are emerging in the derivatives market. It is beneficial to take a closer look to determine whether or not a bearish reversal can be expected.
This chart shows the taker's bid-sell ratio, one of the most valuable metrics for evaluating futures market sentiment. Values above 1 indicate that the bulls are executing their orders more aggressively, while values below 1 indicate bearish selling pressure.
While the taker's bid-ask ratio never recovered above one during the recent uptrend, the price has been rising. However, it is currently falling rapidly, reaching a new low. This cannot be interpreted well and subsequent aggressive selling pressure by the futures trader may soon cause a considerable drop in price.
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Cryptocurrency charts by TradingView.
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