Ethereum’s bearish U-turn? ETH price momentum fades after $1.6K rejection

Ethereum’s native token Ether (ETH) tumbled on July 26, lowering hopes of an prolonged value restoration. The ETH/USD pair dropped by roughly 5%, adopted by a modest rebound to over $1,550.

Ethereum will get rejected at $1,650 

These in a single day strikes liquidated over $80 million price of Ether positions within the final 24 hours, knowledge from CoinGlass reveals.

ETH/USD hourly value chart. Supply: TradingView

The seesaw motion additionally revealed an underlying bias battle amongst merchants who’ve been caught between two extraordinarily reverse market fundamentals.

The primary is the euphoria surrounding Ethereum’s potential transition to proof-of-stake in September, which has helped Ether’s value to recuperate 45% month-to-date.

Nonetheless, this bullish hype is at odds with macroeconomic headwinds, specifically the Federal Reserve’s and the European Central Financial institution’s hawkish stance, which put stress on danger property and noticed Ether value shed 68% from its report excessive of $4,950 so far.

However the quick time period might present some upside for ETH value. As an example, analyst PostyXBT anticipates Ether to endure an interim upside retracement based mostly on the token’s current swings inside an ascending channel sample, as proven under.

ETH/USD four-hour value chart that includes ascending channel setup. Supply: TradingView

In different phrases, ETH’s value might hit $1,700 forward of July’s shut if the sample performs out.

Bearish divergence

Nonetheless, watching the identical restoration development along side Ether’s four-hour relative energy index (RSI), a momentum oscillator indicator, exhibits excessive disparities.

Apparently, Ether’s value has been forming larger highs since July 18, whereas its RSI has been making decrease highs concurrently.

That exhibits a bearish divergence between ETH’s value and momentum, that means bulls have been dropping their grip in the marketplace, and a downtrend could comply with.

ETH/USD four-hour value chart that includes bearish divergence. Supply: TradingView

Ether additionally dangers breaking under its ascending channel’s decrease trendline, which coincides with two extra value helps: the 50-4H exponential shifting common (50-4H EMA; the crimson wave) at round $1,500 and the 0.5 Fib line close to $1,475.  

Associated: Will Ethereum Merge hopium proceed, or is it a bull lure?

Shedding these key helps would doubtless push under $1,350 (the $0.382 Fib line and the blue 200-4H EMA wave) in August, down 10%–15% from Ju’s value, ought to this bearish situation play out.

The views and opinions expressed listed here are solely these of the writer and don’t essentially mirror the views of Each funding and buying and selling transfer entails danger, you need to conduct your personal analysis when making a call.