Ethereum rejected $4,000: Crypto analysis of March 20, 2024

After reaching the $4,000 threshold, Ethereum has entered a corrective phase of 25%. Let’s examine the future outlook for ETH together.

Situation of Ethereum (ETH)

After marking a high at $4,100, the price of Ethereum has begun a downward movement, countering its last bullish phase active since $2,100. Indeed, the price of Ethereum regained, on the morning of this Wednesday, March 20, $3,050. It is worth noting that this drop occurred after the Dencun update. Has the price of the cryptocurrency already integrated this news? What is certain is that the fall of Bitcoin has contributed to that of Ethereum. The $3,700 support was not solid enough, just like those at $3,500 and $3,200. However, it can be observed that the price of Ethereum rebounded on the Fibonacci 50% level, taken into account from $2,100. Thus, a buying pressure seems to be identified at this level.

Ethereum is currently just above its 50-day moving average. The structure remains bullish, but a move of ETH below this threshold could cast doubt on this perspective. As for Ethereum’s bullish momentum, it’s not surprising that it has been revised down, given the direction taken by oscillators and the price of Ethereum itself.

The current technical analysis was conducted in collaboration with Elie FT, an investor and trader passionate about the cryptocurrency markets. Today a trainer at Family Trading, a community of thousands of self-funded traders active since 2017. There you will find live sessions, educational content, and mutual assistance around financial markets in a professional and friendly atmosphere.

Zoom on Derivatives (ETHUSDT)

The open interest on ETH/USDT contracts experienced a notable decrease. This reduction came with a liquidation mainly on the buy side and a reduction in the funding rate, hinting at some capitulation by buyers. It is crucial to mention that a reduction in the funding rate can be interpreted positively when it is considered excessively high. Indeed, it may signal a readjustment towards a healthier balance between the market and its underlying asset, thereby helping to alleviate selling pressure that could weigh on these contracts.

The heat map of ETH/USDT liquidations over a month reveals that the cryptocurrency is just above a strong liquidation area in a price range between $3,000 and $2,800. Above the current price, there is also an area around $4,100, corresponding to the last peak reached by ETH. As the price approaches these levels, a massive trigger of orders could occur, thus increasing the risk of a period of heightened volatility for Ethereum. These zones thus represent a critical point of interest for investors.

Hypotheses for the Price of Ethereum (ETH)

• If the price of Ethereum stays above $3,000, one could anticipate a bullish continuation up to the $3,600 level. The next resistance to consider, if the bullish move continues, would be $4,100. At that point, it would represent an increase of more than +26%.

• If the price of Ethereum fails to maintain above $3,000, we could envision a return to $2,900 or even $2,800. The next support to consider, if the downward movement continues, would be around $2,700. At this stage, that would represent a drop of nearly -15%.

Conclusion

After experiencing a peak at $4,100, Ethereum underwent a significant bearish correction, despite a notable rebound to $3,050, a dynamic partly attributed to the influence of Bitcoin’s fluctuations. Although support at various levels was compromised, the rebound observed at the Fibonacci 50% level shows a certain resilience and potential buying pressure. Thus, the cryptocurrency’s structure remains bullish. However, it will be crucial to closely monitor the price reaction at various key levels to confirm or refute the current hypotheses. It is also important to remain vigilant to potential “fake outs” and market “squeezes” in each scenario. Finally, let’s remember that these analyses are based solely on technical criteria, and the price of cryptocurrencies can otherwise evolve rapidly depending on other more fundamental factors.