Key Points
- Ethereum’s market structure turned bearish, with prices dipping below the $3k support level.
- Despite negative indicators, market liquidation levels suggest a potential upward move for Ethereum.
Ethereum’s market structure recently turned bearish on a 12-hour timeframe.
This change has been marked by a significant price drop below $2850, invalidating the idea of a range formation.
Ethereum’s Dipping Prices and Whale Activity
Ethereum investors found themselves in a tricky spot as prices fell below the significant $3k support level.
The previous week recorded a surge in whale activity and accumulation, but a sudden wave of selling took traders by surprise.
Coinglass’ data analysis revealed that Ethereum saw $174 million of liquidation in the past 24 hours, with 80.42% positioned long.
This drop pushed prices below a key demand zone at $3.1k.
Technical Indicators and Market Predictions
The 78.6% retracement level, based on Ethereum’s February rally, was plotted at $3160.
However, recent losses resulted in a 12-hour session closing at $3007, invalidating the demand zone from $3100-$3200.
On the flip side, the rally preceding this drop reached $3.7k before reversing, forming a month-long range from $3160 to $3700.
A dip below these range lows suggested that liquidity had been swept, clearing the path for another potential rally to $3.7k.
Despite this, technical indicators did not support this argument.
The OBV has been on a downward trend since mid-March, indicating consistent selling volume, and the RSI stood at 34, reflecting increasing downward momentum.
The future of Ethereum remains uncertain, as it could either continue its downtrend and fall below the $3k level, or reverse the recent losses and rally quickly to $3.7k.
Regardless, technical analysis is about managing risk and preparing for the worst-case scenario, while also assessing which outcome could be more likely, and hence, profitable.
Interestingly, the market’s liquidation levels suggested an upward move.
The Cumulative Liq Levels Delta was intensely negative, indicating that short liquidation orders significantly outweighed the long ones.
This implies that a higher move for Ethereum is more likely this week.
To the north, the $3120, $3180, and $3650 levels had the highest concentration of liquidation levels, making them bullish targets.
However, Ethereum could see further losses when traditional markets open for trading this week.
Swing traders could consider buying the dip, with a stop-loss below $2850, based on the liquidation levels.
Please note that the information presented does not constitute financial, investment, trading, or other types of advice and is simply the writer’s opinion.
