Ethereum (ETH), the second-largest cryptocurrency by market cap, seemed to be showing signs of a potential price decline after forming a bearish pattern on the charts, at press time. This bearish trend is not only evident in ETH but also across major cryptocurrencies such as Bitcoin (BTC), XRP, and Solana (SOL).
Since December 2024, ETH has been on a downtrend and has broken down and successfully retested its breakdown level, supporting the bearish sentiment. Based on its recent price action and historical momentum, if this sentiment remains unchanged, there is a strong possibility that ETH could drop by 10% to hit the $2,850-level in the future. However, technical indicators still alluded to the possibility of a price rebound.
On the daily timeframe, for instance, ETH’s Relative Strength Index (RSI) was near the oversold area, hinting at a potential recovery. This, while the 200 Exponential Moving Average (EMA) indicated that the asset was on an uptrend.
Despite the bullish outlook of these indicators, traders remain hesitant to take long positions, as reported by the on-chain analytics firm CoinGlass. At press time, ETH’s long/short ratio stood at 0.94, indicating strong bearish sentiment among traders. 52.67% of top traders held short positions, while 47.33% held long positions. However, traders’ positions have been rising significantly during this bearish period, especially as ETH’s Open Interest increased by 4.5% in the last 24 hours. These metrics indicate that intraday traders are bearish, which could lead to a potential price drop in the coming days.
In addition to traders, long-term holders and whales appear to be accumulating ETH too, as revealed by CoinGlass’s spot inflow/outflow metric. Data revealed that exchanges have seen outflows of over $21 million worth of ETH in the last 24 hours, indicating potential accumulation that could create buying pressure and a buying opportunity.
Overall, Ethereum’s bearish outlook, coupled with traders maintaining a bearish bias and whales accumulating ETH, suggest that the cryptocurrency may face further price declines in the near future. Investors and traders should closely monitor market developments and technical indicators to make informed decisions regarding their ETH holdings.