Ethereum (ETH) imminent trend change? Crypto Analysis of January 24, 2024

The price of Ethereum has entered a correction phase since reaching $2,700. Let’s examine the future outlook for ETH together.

Situation of Ethereum (ETH)

As noted in the analysis of January 11, Ethereum marked a new high. It reached $2,700 before starting a downward movement. Ethereum plunged below the 38.2 % Fibonacci retracement level (taken from the ATH) before dropping just above its daily support at $2,150. Ethereum’s medium and long-term trend remains bullish. However, the breach of this support could jeopardize the short-term trend of the token. At the time of writing, one Ether is trading around $2,200. These recent bearish movements have brought its price below the 50-day moving average. This development suggests the possibility of a trend reversal, thereby calling for increased vigilance from investors.

Regarding the oscillators, they are currently below the midline, which could suggest that Ethereum is currently in an oversold state. From an optimistic angle, this could indicate that it is undervalued. However, adopting a more pessimistic view, it could be interpreted as a sign that the cryptocurrency’s momentum is turning bearish. Note that the existence of a divergence between the price of Ethereum and its oscillators could reinforce this assumption.

The current technical analysis was carried out in collaboration with Elie FT, an investor and trader passionate about the cryptocurrency market. Now a trainer at Family Trading, a community of thousands of proprietary traders active since 2017. Here you will find Live sessions, educational content, and peer assistance around financial markets in a professional and warm atmosphere.

Focus on Derivatives (ETHUSDT)

The open interest for Ethereum has experienced a notable decline of nearly 15% since Monday, January 22. This decrease represents a withdrawal of over $700 million in ETH/USDT perpetual contracts. Out of these withdrawals, more than $60 million were executed forcibly. Although these amounts may seem significant, their impact on the market requires a more nuanced analysis. When compared to the price evolution of ETH relative to its open interest, it becomes apparent that the latter maintains relative stability compared to the ETH price itself. This observation could indicate that entry and exit of traders in the market are not particularly high, or that new traders are entering the market at the same rate as others leave. Thus, this situation opens the door to various interpretations, such as a period of indecision in the market, possible accumulation of orders, etc.

The Ethereum liquidations heat map shows that the cryptocurrency has recently reached an important liquidation zone, situated between $2,200 and $2,150. At present, the price appears to be stabilizing in this area, indicating a period of uncertainty among investors. If the price cannot maintain itself above this last level, the next significant liquidation zone below its price is around $2,000. Above the current price, the $2,500 zone is also worth monitoring. The approach of the price towards these levels could lead to a massive triggering of orders, thus increasing the possibility of a period of heightened volatility on Ethereum. These zones are therefore crucial points of interest for investors.

Hypotheses for Ethereum’s Price (ETH)

If the price of Ethereum maintains above the $2,200 – $2,100 levels, we could anticipate a bullish continuation up to the $2,400 level. The next resistance to consider, should the bullish movement continue, would be the last peak, namely $2,700 and higher if this level is breached. At this stage, that would represent an increase of over +25%.

If the price of Ethereum fails to maintain itself above the $2,200 – $2,100 levels, we might expect a return to $2,000. The next support to consider, should the bearish movement continue, would be around the levels of $1,900. At this stage, that would represent a drop of nearly -13%.

Conclusion

After marking a new high, Ethereum has initiated a correctional phase, leading it towards its former daily resistance. Could this decline be due to the delay in the decision on the Ethereum spot ETFs? What is certain is that it will be crucial to closely observe the price’s reaction to the various key levels to confirm or refute the current hypotheses. It is also important to remain vigilant of potential “fake outs” and market “squeezes” in each scenario. Finally, remember that these analyses are based solely on technical criteria and that the price of cryptocurrencies can also quickly evolve based on other, more fundamental factors.