Ethereum Is Losing Bullish Confidence As It Continues To Decline: More Downside For ETH Price?
In recent days, the price of ETH surged to $1,750, fueled by Grayscale’s win against the SEC. However, it has since been experiencing a consistent decline. Early investors who acquired ETH just before the price spike have started to liquidate their positions. This is exerting significant downward pressure on ETH at its higher levels, setting the price for potential losses in the days ahead.
Long Liquidation Spikes Following ETH’s Rejection
It appears that major investors, often referred to as ‘whales,’ are now taking action as the price of ETH encountered resistance at a key level. This has prompted those who acquired their holdings early to liquidate their positions amid the recent price surge, thereby securing their gains from the uptrend.
Coinglass data indicates a surge in long positions being liquidated after the price of ETH dropped below $1,700. Nearly $14 million in total liquidations occurred as traders hastily moved to lock in their gains. This has faded the upward momentum for Ethereum by weakening buying pressure. As a result, ETH is now susceptible to additional downward movement, lacking sufficient support to maintain its price at current levels.
Additionally, Ethereum’s open interest by strike price reveals a challenging landscape: the bears are facing resistance to plunge the price toward $1,600 while the bulls are struggling at $1,700. Despite a put-to-call ratio of 0.85, the market is leaning bearish, as evidenced by the spike in open interest for $1,600 puts, which has reached 17,203 contracts with a notional value of $28.3 million for September 1.
Conversely, bullish bets have also increased, with open interest reaching 11,386 contracts and a notional value of $18.7 million, primarily targeting the $1,700 level, which is considered the max pain point.
Nonetheless, the market is showing signs of bearish momentum as ETH undergoes a corrective phase, pointing to the possibility of further declines for the altcoin.
What’s Next For ETH Price?
Ethereum price witnessed a spike in bearish domination after it failed to hold momentum near $1,723. As a result, the price broke below multiple Fib channels and reached the crucial support of nearly $1,645.
Ether successfully bounced off the key support level, showing that bullish traders are taking advantage of price dips. Currently, bulls are aiming to drive the price upward and send above the EMA20 trend line. This behavior indicates that the ETH price might continue to oscillate between $1,640 and $1,700 for a while.
If the price fails to climb above EMA20, it will struggle to hold its recovery momentum, suggesting that the bears are still in the game. If the price remains under the 20-day EMA, we could see it drop back to the $1,644 support level. A break below will plunge the price toward $1,600.
On the flip side, if the price moves upwards and breaks back above the $1,740 level, it will potentially test the overhead resistance at $1,845.