Ethereum saw a slowdown in its bullish momentum over the weekend. The cryptocurrency managed to break critical resistance at $1,700 but may retest previous support levels before reclaiming higher levels.
According to Wu Blockchain, Ethereum recently outmoded Bitcoin in terms of open interest (OI) for options contracts. This metric stands at $5.6 billion, compared to $4.3 billion for BTC.
For the first time since the inception of these products, the price of ETH beat the open interest of BTC. As noted by Wu Blockchain, most of the IO recorded for Ethereum option contracts are concentrated calls (buy) on September 30 and December 30.
Both of these dates are post-merger, a highly anticipated event for Ethereum. “The Merge” Has Been Tentatively Set For Mainnet By September 9e.
This event will complete the migration of ETH from a Proof-of-Work (PoW) consensus to a Proof-of-Stake (PoS) consensus. Options market participants appear to be positioning themselves higher or covering potentially short positions with other investment products.
A Different Perspective on Ethereum Price
Data from Material Indicators accurately predicted short-term selling pressure with the potential for increased volatility on yesterday’s essential daily, weekly and monthly candle close. These events often favor sudden movements in the price of an asset.
As seen below, the Material Indicators Trend Precognition Indicator issued a short signal on yesterday’s daily close. This suggested that Ethereum had a strong chance of trending lower.
This short-term selling pressure coincided with technical resistance at the 100-day moving average (DMA). This level swelled with an increase in ask orders as the price of Ethereum trended higher over the past two days.
At the time of writing, ETH price is still registering $13 million in ask (sell) orders at $1,700. This suggests that this level will continue to function as critical resistance for the time being.
This change in momentum for the price of ETH, supported by the precognition of the Material Indicator’s trend and demand for liquidity, could translate into a more persistent decline in price. As seen below, these analysts have presented a possible bearish scenario for Ethereum for the coming months.
The fractal or price prediction below shows that the price of ETH may decline until at least October 2022. These patterns are highly unpredictable, but they could provide traders with insight into price direction in high timeframes.
On this last point, Material Indicators analysts said the following, highlighting how this data offers a different view of the current ETH price narrative, away from the migration to consensus PoS:
I don’t recommend trading fractals or taking them too literally, as they can deviate from both price range and time or be invalidated at any time. That said… All of the above paints a very compelling story for #ETH based purely on algos and TA without any of the POW (Proof-of-Work) -> POS (Proof-of-Stake) discussions