The price of Ethereum reached $2,130 on April 18, its highest point since May 2022. After the high, we saw a retracement of 23%, as it came down to $1,632 on June 15, but another attempt to continue an uptrend was made, with the price recovering just slightly above $2,000 on July 15.
Even though these moves were in double-digit percentages, on a higher time frame like the daily chart, the price has moved sideways since the April high. Now, we are seeing some technical indicators signaling a potential start of a downtrend.
The simple moving averages are starting to form a death cross on the weekly time frame. This occurs when the fast MA (50) crosses the slow MA (200) to the downside and indicates the start of a downtrend.
It especially carries more weight on the higher time frames, and seeing it on a weekly chart where the SMA 200 served as support since 18 June 2022 could be of concern.
Zooming into the daily chart, these moving averages are still far apart, which could be a sign of relief, but in the short term, the price is eyeing another interaction with the MA 200.
This interaction might end as a bounce around the $1,736, which correlates with the local horizontal support, but the situation is still vague.
Real volume is, historically speaking, at its lowest level since October 5, 2020. This could indicate that the current price doesn’t carry much weight as with diminishing volume, retail traders primarily drive the price fluctuations.
Currently, by looking at the on-chain metrics, no data suggests incoming selling pressure. One of the most reliable signs would definitely be exchange inflows, meaning that investors are depositing ETH to exchanges for a potential sale.
Even though The Netflow chart has a positive day, on July 26, it shows low volatility in its histogram, which has been the case since June 18. Of course, this might change with price fluctuations.
So what about the derivatives market? Can we see some short-term selling pressure from traders?
All of the key derivatives market metrics show a positive sentiment at the time of writing. The funding rate favors long-position traders, and open interest is decreasing, meaning there is less leverage on the market, and there are most short-position liquidations. Taker buy sell ratio also shows a bullish sentiment as more buy orders are filled.
It appears that the price of Ethereum is in a tough spot. We are seeing some mixed signals across the technical indicators, but overall the market is indecisive. The price has been in an uptrend from the start of the year until mid-April when it peaked and started moving sideways.
In our previous analysis, we outlined two scenarios that still stand. Some early signs of struggle have been seen but there isn’t much data to draw upon in further price expectations.
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.