Since last weekend, the cryptocurrency market has showcased a sluggish trend with most of the major assets wavering sideways. However, the second-largest crypto by market cap Ethereum has maintained a better position amid the development in Spot ETH ETFs. After the recent market correction, the Ether price has established firm support at $2815, providing buyers with an opportunity for a counter-attack. But will the current market dynamic support this rally?
Also Read: Ethereum Price Analysis Warns $2500 Breakdown As Bearish Pattern Emerges
Ethereum Price Forecast: Can ETF Speculation Drive Prices Higher?
Ethereum Price Forecast| Tradingview
The Ethereum price has been under an active correction trend since May end. From the peak of $3974, the altcoin tumbled 29.27% before finding suitable support at $2815. The horizontal level coincides closely with the 23.6% Fibonacci retracement and 50W EMA creates a strong accumulation area for investors.
A bullish upswing this week has uplifted the asset 10.3% to trade at $3116, while the market cap jumped to $373.9 Billion. This recovery likely followed the recent update to the S-1 registration statement by ETF issuers of Ethereum, along with market speculation that this instrument will start trading by mid-July.
However, until final approval is secured, Ethereum may struggle to gain sufficient recovery momentum.
Also Read: Crypto Prices Today July 10: BTC Touches $59K Amid ETF Inflows, ETH Holds Above $3K
Moreover, the Ether coin experienced a significant drop in Open Interest during the early July sell-off. According to data from Coinglass, Ethereum’s Open Interest fell from $14.98 billion to a low of $11.97 billion, marking a 20% decrease.
ETH Futures Open Interest| Coinglass
This substantial reduction in OI suggests a decline in traders’ commitment or market liquidity for ETH, potentially indicating decreased confidence or interest from investors.
If the market supply pressure persists, the ETH price could rechallenge the $2815 support. The horizontal level, which also serves as the neckline of a double top pattern, could intensify selling pressure and potentially lead to a drop toward $2000.
On a contrary note, if the ETF excitement pushes the Ethereum price above $3325 resistance, the sellers will start losing grip over this asset. A potential breakout from the downsloping resistance trendline will signal major market change and bolster crypto buyers to chase $4000.
Technical Indicator
ADX: The Average Directional Index slope rising to 37% indicates that the downward momentum remains strong, showing no signs of weakening.
Frequently Asked Questions (FAQs)
Open Interest refers to the total number of outstanding derivative contracts, such as futures or options, that have not been settled.
The S-1 registration statement is a filing required by the U.S. Securities and Exchange Commission (SEC) for companies planning to go public, including ETFs (Exchange-Traded Funds). It provides detailed information about the ETF’s business operations, financial condition, and risk factors.
A Double Top Pattern is a bearish technical analysis pattern that occurs when the price of an asset hits a high, retraces, rises again to a similar high, and then declines.
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Sahil is a dedicated full-time trader with over three years of experience in the financial markets. Armed with a strong grasp of technical analysis, he keeps a vigilant eye on the daily price movements of top assets and indices. Drawn by his fascination with financial instruments, Sahil enthusiastically embraced the emerging realm of cryptocurrency, where he continues to explore opportunities driven by his passion for trading
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
