Ethereum is losing ground against Bitcoin? Major support in sight

After The Merge, Ethereum stumbles – Cryptocurrencies behave like risky assets and the period is clearly not at risk. The players are attentive to macroeconomics as well as geopolitics and the situation remains uncertain. After a successful update from a technical point of view, the price of Ethereum is not in good shape. In just a few weeks, Ethereum lost 25% before finding buyers. The price of second capitalization cryptocurrencies is having a complicated year and it could continue. Can Ethereum continue to be strong against Bitcoin? Can it regain value against the dollar?

This market analysis is brought to you in collaboration with CryptoTrader™ and its algorithmic trading solution finally accessible to individuals.

Ethereum back at $1,250

In this article, we discussed the possibility of returning to $1,250because it is a level of support important which corresponds to the neck line of the “W” formed in weekly. It is now done:

Ethereum price against the dollar (1W)

Ethereum broke an important level by going below $1,900 last May. Since then, the price has evolved in a trend bearish and the price has found buyers at the level of bracket at $900. The course was rejected at the level of the resistance at $1,900 and at the level of institutional bias (EMA 9/EMA 18). For the moment, the institutional bias makes resistance and this could still be the case in the event of a rebound between $1,450 and $1,650. If buyers fail to break through this dynamic resistance, Ethereum price could reach $900.

The momentum is always bearish on a weekly basis, the RSI is still moving below the bearish trendline. It will be necessary to free oneself from it to regain purchasing power.

Whatever happens, you cannot be bullish on Ethereum as long as it is moving below the bearish trendlinethat he gets rejected at each contact with the institutional bias and that it evolves under the important area at $1,900. Ethereum is bearishbut the course could be in a tidy Between $900 and $1,900.

Ethereum is in the daily recharge zone

Buyers must react in the reloading area (0.618-0.786 Fibonacci retracement). This is an area where buyers have the opportunity to change dynamics:

Ethereum is in the reload zone.
Ethereum price against the dollar (1D)

The price reacts at the level of the bracket at $1,250 and in the reloading area. The reaction remains timid on a daily basis, it will take more to relaunch a bullish momentum. For the moment, the course remains blocked under the institutional bias, this one could do resistance in the coming days. In the very short term, the dynamic is bearish and, if the support is lost, the scenario in red could be set up. It’s a scenario bearish which would see the price return to the level of the next support at $900. We’re not there yet, but buyers need to change momentum here to avoid a drop in 35%.

The momentum is bearishit is necessary to relaunch troughs and ascending peaks on this side as well.

Ethereum loses strength against Bitcoin

Since July, Ethereum had managed to regain strength against Bitcoin, and outperform. Since The Merge, Ethereum is losing ground and the fall may not be over:

The ETH/BTC pair is in a weekly range.
Price of Ethereum against Bitcoin (3D)

The course is always in a tidy since May 2021. The buyers had the opportunity to break out of the range a little before The Merge, but the sellers showed up and held the range. the local summit was built on a “V top”. It’s a fragile structure which may need to be retested. In the event that the institutional bias would resistancethe price could then head once again towards the bottom of the range.

Output bearish of this weekly range would hurt the altcoins very badly. This would indicate that the capital are moving towards bitcoin, and that players are moving away from altcoins.

Ethereum on-chain analysis

The behavior of large wallets

The price fell during the Ethereum update and the wallets that have more 1,000 ETH took the opportunity to take some profits:

The number of addresses with more than 1,000 ETH dropped during The Merge update.
Number of addresses with more than 1,000 ETH Source: Glassnode

The players took advantage of the ETH update to take some profits. If the trend is bearish in the short term, theaccumulation since May 2022 seems to still be relevant.

The actors with 10,000 ETH in the portfolio have sold since The Merge:

The actors have sold out since The Merge update.
Number of addresses with more than 10,000 ETH Source: Glassnode

We see that the big wallets sold following The Merge. As with wallets with more than 1,000 ETH, these players seem accumulate of Ethereum for the long term.

Analysis of unrealized losses

Very often, the bear market ends when the actors have capitulated, and the actors believe that the assets will continue to fall. Here is the graph of unrealized losses on Ethereum:

The actors seem to have capitulated in June 2022.
Unrealized loss charts Source: Glassnode

The unrealized losses form a peak, as in the previous capitulations of the market. We must remain vigilant, because there may be another peak in the event of another sharp drop in Ethereum. A capitulation took place, but the level to $900 must hold to avoid a panic movement under the support.

Ethereum is bearish on a weekly basis. The asset is still trading below the bearish trendline, the resistance at $1,900 and the institutional bias. Buyers need to hold support at $1,250 to avoid a 35% drop to join the next support at $900. The ETH/BTC chart is still in a range and The Merge did not allow the bullish momentum to resume on this pair. Attention, it is now possible to return to the bottom of the range, Bitcoin can regain control of the market. On-chain analysis shows that the big wallets took profits after The Merge, but the trend remains accumulation for now.

Afraid of making a mistake by trading your cryptocurrencies yourself? Take the stress out of trading by joining CryptoTrader™, a fully automated crypto-asset manager.

John R. Zepeda

I have extensive experience working as a content writer in the areas of cryptocurrencies and finance, where I create interesting pieces that both inform and engage their audiences.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button