As Ethereum (ETH) retests the $3,500 low amid the market-wide drop, CryptoQuant analyst ShayanBTC suggests the asset could face further declines if current trends in the futures market do not improve.
The recent market turbulence has driven multiple altcoins to their lowest levels in weeks. Notably, Ethereum recently slumped to the lower spectrum of the $3,500 threshold for the first time in over three weeks, retesting the $3,503 low earlier today.
Amid the bearish conditions, investor anxiety has returned. Data from the futures market indicates that market participants have turned bearish, betting on steeper declines and a sustenance of the turbulence.
In a recent analysis, ShayanBTC called attention to the Taker Buy Sell Ratio, which measures the aggressiveness of buyers versus sellers in the futures market. A ratio above one indicates that buyers are dominating, while a ratio below one suggests that sellers are more aggressive.
According to market data, the seven-day moving average of this ratio has been dropping recently, failing to climb above one. This downward trend indicates that most futures traders are selling Ethereum aggressively.
Such behavior could be driven by speculation or profit-taking amid the current market conditions. ShayanBTC argues that the significant decline in this ratio serves as a bearish signal, suggesting that the downward trend in Ethereum’s price could continue if this selling pressure persists.
Meanwhile, despite derivatives volume spiking 131% to a record $24.8 billion, Ethereum’s long/short ratio, which measures the ratio of long (bullish) to short (bearish) positions, has witnessed a massive drop. This ratio has collapsed to 0.8921, suggesting a dominance of short positions, per Coinglass data.
Ethereum is currently trading at $3,537 following a mild recovery from the $3,503 floor price recorded earlier this morning. Despite a 3.58% drop today, the crypto asset trades above the 200-day EMA ($2,945) and 50-day EMA ($3,381).
