Can Ethereum stay above the $1650 price level
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- The higher timeframe price action of Ethereum showed a bearish structure.
- A bounce could develop after such a large drop, making the $1780-$1800 an area of interest for bears to defend.
On 6 May, Ethereum [ETH] formed a lower high at $2019, a level that was retested as resistance on 14 July. After this retest, the asset has trended downward. The recent drop on 17 August was followed almost immediately by good news.
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ETF applications for Ethereum were likely to be approved, according to a Bloomberg report. Could this optimism fuel an ETH recovery? The price was at a support zone that stretched back to mid-January.
The $1170 and $1630 levels were both breached, showing bearish intent
Source: ETH/USDT on TradingView
On the daily price chart, Ethereum flipped the market structure to bearish on 2 August. ETH bulls managed to defend the $1820-$1850 support zone since mid-June, but they were finally overcome. The recent wave of selling brought ETH as low as $1550 on 17 August on Binance.
The RSI and OBV fell lower and reflected bearish momentum and large selling pressure. While a 1-day trading session had not yet closed below $1626, the wick to $1550 signaled bearish dominance.
Therefore, traders can wait for a move upward to sell ETH in anticipation of rejection from a level of resistance overhead. The $1740-$1780 area had been important in mid-June but failed to staunch the selling pressure during the recent slump. A retest of this area and another move down was possible.
The rising mean coin age suggested selling activity was not as strong as it seems
The age consumed metric last saw a significant spike in late July. The lack of activity in recent days suggested that the selling activity was not accompanied by large amounts of ETH leaving the addresses of holders.
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The mean coin age metric continued to trend higher. Together, it suggested that accumulation was still in progress despite the volatility.
The MVRV ratio showed the asset was undervalued. The past few days also saw notable exchange outflows, supporting the idea of accumulation during the drop. The price action favored the sellers but a bounce could occur in the coming days.