Ethereum’s bounce from $1550 encourages buyers, but is it a trap?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
Ethereum prices saw a rejection at the $1715 level and the trend has been bearish since then. However, the asset has traded within a range since mid-January. Could ETH descend to $1500 from here?
How much are 1, 10, and 100 Ethereum worth today?
A recent report highlighted that Ethereum exchange supplies had fallen, which suggested selling pressure might not spike. On the other hand, the price action showed that the lower timeframe was bearish. How much lower will the prices go?
Source: ETH/UDST on TradingView
The aforementioned range was highlighted in yellow. It extended from $1505 to $1708, with the mid-range at $1606. All three levels have been significant in the past six weeks. In particular, the mid-range was respected multiple times, which underlined the credibility of the range.
On 22 February the market structure flipped to bearish and was marked in orange. Since then, the price continued to make a series of lower highs and lower lows.
The RSI was also beneath neutral 50 to show bearish momentum at press time. The CMF stood well below -0.05 to show heavy capital flow out of the market.
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After the sharp fall in prices on Friday, the market has moved sideways. An important thing to note was the large imbalance left on the charts, highlighted in white. It was likely that this fair value gap will get filled partially or completely in the coming days.
This imbalance has confluence with the mid-range mark as well. Therefore short sellers can wait for a retest of $1600-$1610 before looking for selling opportunities.
Sour
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