Ethereum has been facing resistance at the critical $4K level, leading to increased selling pressure and a decline in price. However, there is a significant support zone ahead, including the 100-day moving average at $3,430 and the 0.5 Fibonacci retracement level at $3,419. This suggests that the current price action may continue its bearish retracement in the short term, with the 100-day moving average and the 0.5 Fib level acting as primary support for buyers.
On the 4-hour chart, Ethereum has formed a head and shoulders pattern, indicating a lack of bullish momentum and an increase in supply. The price has broken below the neckline of this formation, increasing the likelihood of a bearish scenario. A bearish divergence between the RSI indicator and the price further emphasizes seller dominance, raising concerns about Ethereum’s future trajectory. Currently, the price is at a critical support level of around $3.6K, and if sellers manage to breach this level, the bearish trend is likely to continue.
Traders may be interested in the behavior of futures market participants as Ethereum struggles to surpass the $4K mark. The Taker Buy Sell Ratio, which assesses the relative aggressiveness of buyers versus sellers, has been declining sharply in recent days, indicating aggressive selling by futures traders. This trend suggests that the current downward retracement could persist if seller dominance continues.
In conclusion, Ethereum is facing selling pressure near the $4K level, with a significant support zone ahead at the 100-day moving average and the 0.5 Fibonacci retracement level. The formation of a head and shoulders pattern on the 4-hour chart and bearish divergence between the RSI indicator and price indicate a potential bearish scenario. Traders should keep an eye on the behavior of futures market participants, as aggressive selling by this group could prolong Ethereum’s downward trend.
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