Ethereum prints its first red candle after nine days of consistent rise. It faced rejection to its bid at $3,900, retracing at $3,860.
The coin is currently printing a doji, trading slightly below its opening price at the time of writing. Nonetheless, it registered notable trading volume over the last 24 hours. This does not equate to the massive buying pressure that current prices suggest.
Data from CryptoQuant suggests that the ongoing price decline may be short-lived as investors are moving ETH from exchanges. Exchange reserves are declining in response to the unfolding trend. The data aggregators report that the trading platform experienced an inflow of 1.67 million ETH, offset by an outflow of 1.71 million ETH.
Glassnode reports the inflow of fresh liquidity into Ethereum. Traders have massively accumulated the asset since early July. However, a new trend is unravelling: first-time buyers are aggressively stacking up. The supply held by this group of buyers increased by 16%, indicating renewed interest and participation from first-time buyers.
Both platforms suggest that the largest altcoin may continue its uptrend; however, Glassnode’s data accounts for previous investors’ behaviour over the last twenty days. The increase in market participants during this period undoubtedly boosted the value of ETH. It surged for most of the highlighted period.
However, this does not mean the trend is irrelevant to future price actions. The asset may continue to soar if the trend remains constant.
Derivatives Are Bearish
Data from Coinglass indicates a growing bearish sentiment among traders. The derivatives market reveals a notable shift in their estimate about Ethereum’s next price action. There is an increasing sense that the uptrend may be nearing its end. As a result, they are opening more short positions. Their positions make up more than 51% of the open positions over the last 24 hours.
The latest reading is significant as this is the highest long/short ratio ETH has seen. The last time the asset saw a ratio this low was on July 11; it printed a doji, as it is doing at the time of writing.
However, this does not reveal the belief of all market participants as 57% are longing the asset. It means the whales are expecting further retracement. It is worth noting that ETH futures are seeing their highest participation in the last three months, with open interest nearing $60 billion.
Recent readings on long and short positions indicate that the altcoin may experience further declines in the coming days if the trend persists.
Ethereum May Drop to $3,500
Ethereum retraced following its failed attempt at $3,900. It dropped after testing bollinger’s upper band and has since struggled to break above the mark.
The relative strength index is at 85 amid the slight correction, indicating that the asset is overbought and may slide further. It is worth noting that the metric broke above 70 on Jul 9 and remained above the mark. The asset may see a v
The Fibonacci retracement levels indicate a potential decline to the 23% mark at $2,519. The bulls must defend the mark, as failure to do so will send Ethereum as low as the 38% mark, around 3,293.
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