Ethereum (ETHUSD) Price Analysis: 2 Days of Indecision in the Market
One week ago, Ethereum was testing support in the $280 range. Since then, the market has dropped another 30% as ETH trades in the $190-$200 range:
As we see above, the volume on these dumps has been much higher than the volume from the dip from May, when ETH was valued at the $800 levels.
The indicators OBV and MACD nonetheless still don’t show any bullish signals, or a reversal pattern.
Now, the market is testing a support, together with a very high volume, which means there is a considerable level of supply absorption. At this level, there are a strong bullish momentum buying up the panic sellers. However, it’s uncertain if their buying pressure will be strong enough to start a rally to recover the $200 levels. As the 2 past days, the daily candle closed as a “doji”, showing a bit of indecision present over the last couple days:
This candle set-up is called a double doji. This structure acts as a visual representation of market indecision. This shows us that, even though the intraday volatility was high, the range between the opening and closing price of the candle was quite low. Although there is indecision, its likely that the bearish pressure could ultimately win over the bulls, and we could see a deeper capitulation from the long holders. However, in contrast, this also does give the bulls a chance for a possible rally.
To reinforce this view, considering the high number of open short positions on Bitfinex, we can alert also for the possibility of a short squeeze rally on next hours or days. Therefore, we don’t find it safe enough for a trade in this range, as this undecided pattern makes it very risky for any position.