Crypto: Ethereum's momentum disappoints: Analysis of June 12, 2024

After a rise of more than 20%, Ethereum’s price is undergoing a bearish correction. Let’s examine the future outlook for ETH together.

Ethereum (ETH) Price Situation

After rising from $3,000 to $3,800 following the approval of Ethereum spot ETFs, the cryptocurrency’s price stabilized before facing bearish pressure, bringing it down to $3,500. This decline was fueled by Bitcoin’s slight drop, which pulled the entire cryptocurrency market with it. Currently, the cryptocurrency seems to be stabilizing, demonstrating renewed interest from buyers. At the time of writing this article, one Ether is worth slightly more than $3,500. Thus, it is below the $3,800 mark, which corresponds to the point of control noted since its last rebound.

The point of control (POC) refers to the price level with the highest trading volume over a given period, indicating a key support or resistance zone.

The next value area to consider is just below the Ethereum price level, specifically below the $3,000 mark. This area coincides with the identified support zone at the same price level.

Ethereum remains above its 50-day and 200-day moving averages, continuing to confirm the idea that the cryptocurrency is in an uptrend. However, it should be noted that Ethereum’s momentum is being revised downwards, as evidenced by the oscillators and Ethereum’s own price.

The current technical analysis was conducted in collaboration with Elie FT, an investor and passionate trader in the cryptocurrency market. Today, he is a trainer at Family Trading, a community of thousands of self-employed traders active since 2017. You’ll find Lives, educational content, and mutual support around the financial markets in a professional and friendly atmosphere.

A Closer Look at Derivatives (ETHUSDT)

The open interest of perpetual contracts linked to Ethereum has recently followed the course of its underlying asset. Coupled with a still-positive funding rate, this demonstrates majority participation from buyers in Ethereum derivatives. However, it should be noted that, although positive, these rates have been slightly revised downwards, reflecting a slight capitulation from buyers. This phenomenon could be explained by increasing selling pressure, but also by liquidations, particularly marked on the buyers’ side.

The liquidation heatmap of ETH/USDT over three months reveals that the liquidation zone at $3,700 was recently reached. It seems to have triggered buying interest that was not sustained, allowing the bearish movement to continue. Currently, the most significant liquidation zones are on both sides of the current price. Above, we can note the $3,900 zone. Below, we can note the $3,000 zone. The price approaching these levels could trigger a massive number of orders, thus increasing the risk of a period of heightened volatility for Ethereum. These zones therefore represent a crucial point of interest for investors.

Hypotheses for Ethereum (ETH) Price

• If Ethereum’s price remains above $3,300, we could anticipate a bullish recovery up to $3,900 or even $4,000. The next resistance to consider would then be $4,100. If the upward movement continues, this could mark a new high at $4,500 and even reach Ethereum’s ATH, just below $4,900. At this stage, it would represent a rise of more than 37%.

• If Ethereum’s price fails to stay above $3,300, we could envisage a return to around $3,000. The next support to consider, if the bearish movement continues, would be in a price range between $2,800 and $2,700. At this stage, it would represent a decrease of around -13%.

Conclusion

After an initial rise followed by stabilization, Ethereum’s price has faced bearish pressure, partly due to a decline in the overall cryptocurrency market. Currently, the cryptocurrency shows signs of stabilization with renewed interest from buyers. Although these fluctuations cast doubt on Ethereum’s future direction, its underlying trend remains bullish, favoring the idea of a potential rebound. However, it will be crucial to closely monitor the price’s reaction to the different key levels to confirm or invalidate current hypotheses. It is also important to stay vigilant against potential “fake outs” and market “squeezes” in each scenario. Finally, let’s remember that these analyses are based solely on technical criteria and that cryptocurrency prices can also evolve rapidly based on other more fundamental factors.