Crypto

ETH Futures Market Appears Overheated

Ethereum Market Insights 📉

Current Price: $2,600

Ethereum’s price continues to decline after being rejected at the $2,700 resistance level. This marks the second consecutive day of losses for Ethereum as it responds to a mild outflow of over $20 million from US spot Ethereum Exchange Traded Funds (ETFs).

Key Market Indicators:

  • Estimated Leverage Ratio: The ratio has risen to 0.39, reaching its highest level since early July, indicating a potential for a short squeeze. A higher ELR suggests that more traders are speculating on falling prices, making the market susceptible to sharp upward price movement if a squeeze occurs.

  • ETF Outflows: The outflow of $20.80 million from US spot Ethereum ETFs this week reflects reduced institutional confidence.

  • Ethereum Coinbase Premium Index: This indicator is currently at -0.039, below the neutral level, signaling weakened demand from large investors or whales. For a price recovery, this index needs to rise above zero.

Current Price Trend:

Ethereum faced resistance at its descending trendline and has seen a 2.9% drop, trading around $2,600 at present. If the downward trajectory continues, it may retest a support level around $2,461.

The Relative Strength Index (RSI) currently reads at 56 and is trending downwards, reflecting declining bullish momentum. Should the RSI dip below 50, further decline in Ethereum’s price may be expected.

Price Forecast:

  • A close above the descending trendline at $2,820 could initiate a rally towards resistance at $2,927.
  • Conversely, a continued decline could see Ethereum testing the support at approximately $2,461.

Suggested Actions:

  • Given the bearish sentiment and current market indicators, the suggested action is to Sell in red if holding Ethereum as it appears to be in a downtrend.

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