Ethereum, the world’s second biggest cryptocurrency, has continued its downward trajectory, passing through the $1,200 level.
To date, the exchange rate has reached $1,170.49. Data from CoinGecko shows that the coin has been trading at a loss on a weekly basis.
Here’s a quick glance at how ETH has been performing:
- The price of ether is currently below the $1.2k range
- Investors are preparing to sell, as shown by the high exchange netflows
- If the bears manage to push beyond the $1,152 support level, the next important support is located at the $906 level
After initially plunging as rumors of an impending FTX collapse hit the market, the price eventually settled into a sideways trend and has remained there since. However, the trading range for this sideways movement is beginning to contract.
The formation of a relief rally is being jeopardized by the current trading range. More losses are on the way for the Ethereum market, therefore would-be buyers and sellers of ETH should proceed with caution.
Ethereum Relief Rally In The Offing?
As the Bollinger band constricts around the $1,199 price range, the chance of a relief rally increases.
ETH has been trading between $1,306 and $1,092.85 as of this writing. As the Bollinger band shrank, so would this.
In addition, CryptoQuant observes a high exchange netflow, which indicates an increase in exchange reserves. This signifies that traders and dealers are preparing to sell their ETH.
The RSI statistics provide support for the bears. Currently, the data are crossing each other bearishly and going towards the oversold region.
However, when the RSI recovers over the next few days or weeks, investors and traders could use this to their advantage for a little price increase.
In contrast, the MFI indicator swings in opposition to the downward trend, indicating a possible turnaround.
Steering Clear Of The Ascending Triangle
Previous price fluctuations have produced an ascending triangle with a narrow base. This is followed by a bearish breakout, which in this case might occur around $1,152.
ETH bulls should then keep an eye on the $1,152 support, as a breach here might portend further losses.
A bearish breach below the indicated support level will likely bring the price below ETH’s important support at $906.
Despite the fact that such a decline would be catastrophic for ETH investors, short positions would profit substantially in an otherwise unfriendly crypto market.
ETH total market cap at $143 billion on the daily chart | Featured image from TradeMap, Chart: TradingView.com