Originally published on: December 18, 2024
Ether’s price has seen a significant drop of 6.35% from its recent high as of Monday, reaching $4,109 this week. The altcoin formed a bearish engulfing pattern on the daily chart, signaling a potential downward trend for Ethereum.
This marks the third time ETH has been rejected at the $4,000 level in 2024, indicating strong resistance at this price point. Despite multiple attempts to break through this barrier, Ethereum has struggled to make a bullish breakout above $4,000.
Analyzing the weekly chart, we can see that the $4,000 resistance has been tested multiple times since 2021 and thrice in 2024. However, Ethereum has failed to sustain a rally above this critical level.
Data from CoinGlass reveals that Ethereum’s future open interest hit a new all-time high of $28.70 billion on December 17. While traders leaned towards long positions in November, the sentiment has shifted towards bearish in recent days.
The aggregated premium of futures positions has turned bearish for the first time since November 6, indicating a rise in short positions compared to long positions. This shift in market sentiment has pushed prices below the $4,000 mark.
Despite short-term bearish signals, Ether’s market structure remains in an uptrend, with higher highs and higher lows. From a technical standpoint, ETH price could retest the $3,715 to $3,628 range, where a fair value gap and support from a 200-day EMA are present.
This level holds significance as the cumulative long liquidation leverage positions between $3,700 and $3,800 exceed $500 million, suggesting a potential reversal in prices. However, there is also a concentration of short-leveraged positions between $3,850 and $4,200, indicating choppy price action ahead for ETH/USD.
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