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Crypto: Ethereum stays above its support Crypto analysis of 09 May 2024

Thu 09 May 2024 ▪ 5 min of reading ▪ by Family Trading Partnership
Investissement

Ethereum bounces off its support after experiencing a 30% drop. Let’s take a look at the future prospects for ETH.

Logo ETH fond rouge et bleu avec de parts et d’autres un ours rouge et un taureau bleu enragés. En haut de chacun, on peut voir la barre de pouvoir de chacun.

Ethereum Price Situation (ETH)

After reaching a peak of $4,090, the Ethereum price quickly hit its support at $3,300. Unfortunately, after two attempts at a rebound, ETH finally broke through this price level downwards. As a result, the cryptocurrency quickly headed towards the $2,900 mark. Since then, Ethereum appears to be consolidating in a range above this last price level.

At the time of writing this article, one Ether is worth $2,984. It is positioned below the value area fixed at $3,400. Likewise, the Ethereum price is under its 50-day moving average, which is now trending downwards. Although the underlying structure remains bullish, this naturally brings into question its durability, at least in the short term. As for oscillators, it can be seen that they display a market dynamic that seems to be stabilizing, pointing to a period of uncertainty.

ETH/USD Chart (1D)
ETH/USD Chart (1D)

The current technical analysis was conducted in collaboration with Elie FT, an investor and passionate trader in the cryptocurrency market. He is now a trainer at Family Trading, a community of thousands of self-account traders active since 2017. There you will find Lives, educational content, and support on financial markets in a professional and friendly atmosphere.

Focus on ETHUSDT Derivatives

The open interest on ETH/USDT contracts has followed the trend of their price. However, on Thursday, May 9th, a slight divergence was observed. While the ETH price tended to fall, the open interest for ETH/USDT contracts slightly increased, which might indicate a rise in short positions. Unfortunately, the liquidations, not being significant, do not provide more information. However, a slight increase in the funding rate was noted, which could signal bullish pressure on the perpetual contracts associated with Ethereum.

Open Interest / Liquidations & Funding rate ETH/USD
Open Interest / Liquidations & Funding rate ETH/USD

The three-month ETH/USDT liquidation heatmap reveals that the liquidation area around $2,900 has attracted buyer interest. Indeed, each time this level was reached, the cryptocurrency’s price recorded a notable increase. Currently, the most significant liquidation zones above its actual price are found at $3,300, and even higher, between $3,600 and $3,700. The $4,100 zone is also notably marked. Below the current price, the $2,700 level, and even lower, the $2,450 level should be highlighted. The approach of the price towards these levels could lead to a massive triggering of orders, thus increasing the risk of a period of increased volatility for Ethereum. Therefore, these areas represent a crucial point of interest for investors.

ETH/USDT Liquidation Heatmap (3 months)
ETH/USDT Liquidation Heatmap (3 months)

Predictions for Ethereum Price (ETH)

  • If the Ethereum price holds above $2,900, we might anticipate a return to $3,300. The next resistance to consider if the bullish movement continues would be $3,700 or even higher at Ethereum’s last peak. At this stage, that would represent an increase of over +37%.
  • If the Ethereum price fails to hold above $2,900, we could consider a return around $2,700 or even $2,600. The next support level to consider if the bearish movement continues would be in a price range around $2,300. At this stage, this would represent a decrease close to -22%.

Conclusion

Despite a significant drop from its peak, Ethereum is showing signs of stabilization. However, being under critical thresholds and an uncertain trend underline the need for caution in assessing its future price. Thus, it will be crucial to closely observe the price reaction at various key levels to confirm or reject the current hypotheses. It’s also important to remain vigilant for potential “fake outs” and market “squeezes” in each scenario. Finally, let’s remember that these analyses are based solely on technical criteria, and cryptocurrency prices can moreover rapidly evolve based on other more fundamental factors.

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Family Trading avatar
Family Trading

Family Trading est une Communauté de traders a compte propre active depuis 2017 offrant Lives, contenus éducatifs et entraides autour des marchés financiers dont celui des cryptomonnaies avec à ses côtés Elie FT, investisseur et trader de passion sur le marché crypto.

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