Key Points
- Ethereum [ETH] has a bearish market structure but is aiming for the next key resistance zone.
- Despite the bearish structure, Ethereum’s network activity and volume indicators are showing signs of slow growth.
Ethereum [ETH] is currently displaying a bearish market structure on the daily chart, even though it’s targeting the next key resistance zone. The volume has been lackluster in recent days, suggesting a possible retracement in the coming week.
Ethereum’s Recent Performance
Ethereum managed to climb back above the $3k mark. Interestingly, the previous resistance zone of $3.1k has now turned into a support zone. The interplay between whale deposits and exchange reserves indicates that recent deposits were minor compared to the outflows witnessed in the last two months.
The gas fee of the Ethereum network has hit lows last seen in May, indicating reduced network activity. This isn’t a positive sign as it reflects decreased on-chain demand and slow growth.
Understanding the Market Indicators
On July 13th, Ethereum closed a daily trading session at $3,201, breaking through the resistance zone in the $3.1k area. However, the market structure and momentum remained bearish. The Chaikin Money Flow (CMF) showed a reading of -0.05, indicating significant capital flow out of the market. The On Balance Volume (OBV) failed to start an uptrend due to stuttering buying volume over the past ten days. This suggests that the volume was too weak to be considered a clear sign of bullish strength.
The daily Relative Strength Index (RSI) stood at 45, signaling bearish momentum, but has crept higher over the past week. As it stands, Ethereum might not be ready for a quick upward move unless more trading volume enters the market.
The $2.7k-$2.8k zone to the south was an attractive pool of liquidity. It was tested in the first week of July but not entirely swept. The subsequent price bounce above $3.1k meant the next liquidity cluster at $3.5k-$3.7k would be the target for bulls.
The Open Interest has risen alongside the prices, and the funding rate was positive. The sentiment was strongly bullish, and the spot CVD was recovering as well. If the trend remains intact, the chances of an Ethereum move toward $3.6k would become more likely.
