Ethereum’s native token, Ether (ETH), fell on July 25, dampening hopes of a long price recovery. ETH/USD fell by about 5%, before seeing a modest retracement above $1,550.
Ethereum is rejected at $1,650
According to data from CoinGlass, these overnight moves liquidated Ether positions worth more than $80 million in the past 24 hours.
The bailout also revealed an underlying conflict of biases among traders caught between two diametrically opposed market fundamentals.
The first is the euphoria surrounding the potential transition of Ethereum to proof of stake in September, which saw the price of Ether recover 45% since the beginning of the month.
However, this bullish hype is at odds with the macroeconomic ones, namely the hawkish stance of the Federal Reserve and the European Central Bank, which has put pressure on risk assets and lowered the price of Ether. .
But in the short term, the price of ETH could experience some upside. For example, PostyXBT analysis predict that Ether will undergo an intermediate change to the upside, based on the recent swings of the signal inside an ascending channel, as shown below.
In other words, the price of ETH could reach $1,700 before the close of July if the trend is confirmed.
However, when the same rallying trend is observed in conjunction with the Ether’s quadruple Relative Strength Index (RSI), a momentary swing indicator, it shows major differences.
Interestingly, the price of Ether has been making higher highs since July 18, while its RSI has made lower highs at the same time.
This indicates a bearish divergence between ETH price and momentum, which means that the bulls have lost their grip on the market, and a decline may be imminent.
The ether is also in danger of breaking below the lower trendline of its ascending channel, which is in line with two other price supports: the 50-4H exponential moving average (50-4H EMA; the red wave) at approx. at $1,500 and the 0.5 Fib line near $1,475.
Also Read: Will Ethereum Merger Fever Continue, Or Is It A Bull Trap?
If this bearish scenario were to succeed, a break below $1,350 (the $0.382 Fib line and the blue wave of the EMA 200-4H) in August would likely lead to a 10% drop due to the loss of these key supports. 15% off today’s price.
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