Ethereum falls below $1320, can traders look to short the bounce

ambcrypto.com:

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.

Ethereum saw a sharp rejection from the range highs near $1400 a couple of days ago. Combined with the strong drop that Bitcoin saw, Ethereum also developed a lower timeframe bearish structure.

The Merge took place in mid-September, but the price has posted losses since then. Transaction fees have fallen, although this might be due as much to lowered interest in the NFT domain as much as due to the Merge.

Source: TradingView

The price charts showed a range between $1400 and $1240 develop. The Visible Range Volume Profile showed the Value Area High and Low to lie at these levels respectively. The Point of Control was at $1327 and represented a strong resistance level.

Moreover, the $1300-$1340 zone represented a former zone of support that was retested as resistance, at the time of writing. The swing high and low formed last week (yellow range) also had close confluence with the VPVR’s findings. Hence, a rejection from the mid-range would likely see ETH revisit the $1240 lows.

The RSI was below the neutral 50 mark, and a hidden bearish divergence emerged as the price made a lower high while the RSI made a higher high.

This could signal a continuation of the short-term downtrend. The A/D line saw a move upward in recent hours, to show some buying pressure. However, the CMF did not yet show significant capital flow into the market.

Source: Santiment

Some of the on-chain metrics leapt higher in the past two weeks. The daily active addresses metric surged around the time of the Merge. The network growth for Ethereum rushed higher over the past few days as well. But approached a peak that it has not