Originally published on: December 18, 2024
Ethereum’s price has taken a hit, dropping 6.35% from its recent high of $4,109. This decline comes after the altcoin formed a bearish engulfing pattern on the daily chart, signaling potential downward movement.
The $4,000 level has proven to be a tough resistance for ETH, with this being the third rejection this year. Despite multiple attempts to break through, Ethereum has struggled to move past this key level.
Data indicates that Ethereum’s future open interest hit an all-time high of $28.70 billion, but sentiment may be turning bearish as the aggregated premium of futures positions has shifted. More short positions have become active in recent days, leading to the price drop below $4,000.
The long/short ratio for ETH has dropped to 0.9, further confirming the shift towards bearish sentiment. However, the market structure for Ether remains intact, with higher highs and higher lows maintaining an upward trend.
From a technical standpoint, ETH’s price could retest the $3,715 to $3,628 region, where a fair value gap and support from a 200-day EMA are located. This area also sees a concentration of long liquidation leverage positions, making it a significant level for potential price reversals.
On the flip side, short-leveraged positions are concentrated between $3,850 to $4,200, indicating possible choppy price action in the near future. As traders navigate these uncertain waters, it’s essential to conduct thorough research before making any investment decisions.
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