Ethereum’s native token Ether (ETH) fell on July 26, dampening hopes of a prolonged price recovery. ETH/USD fell around 5%, followed by a modest rebound to above $1,550.
Ethereum is rejected at $1,650
These overnight moves liquidated more than $80 million in Ether positions in the past 24 hours, according to data from CoinGlass revealed.
The seesaw action also revealed an underlying bias conflict among traders who were caught between two starkly opposing market fundamentals.
The first is the euphoria surrounding the potential of Ethereum switch to proof of stake in September, which has helped Ether’s price recover 45% since the start of the month.
However, this bullish hype is at odds with macroeconomic headwinds, namely the Federal Reserve and the European Central Bank. warmongering positionwhich put pressure on risky assets and saw the price of Ether lose 68% to date from its all-time high of $4,950.
But the short term could provide an advantage for the price of ETH. For example, analyst PostyXBT anticipates Ether will undergo an intermediate retracement to the upside based on the token’s recent swings inside an ascending channel pattern, as shown below.
In other words, the price of ETH could reach $1,700 before the July close if the trend is confirmed.
Nonetheless, observing the same rallying trend in conjunction with Ether’s four-hour Relative Strength Index (RSI), a momentum oscillator indicator, shows extreme disparities.
Interestingly, Ether’s price made higher highs since July 18, while its RSI simultaneously made lower highs.
This shows a bearish divergence between ETH price and momentum, which means the bulls have lost their grip on the market and a downtrend may follow.
Ether is also at risk of breaking below the lower trendline of its ascending channel, which coincides with two other price supports: the 50-4H Exponential Moving Average (50-4H EMA; the red wave) at around $1,500 and the 0.5 Fib line near $1,475.
The loss of these key supports would likely push below $1,350 (the $0.382 Fib line and blue wave 200-4H EMA) in August, down 10%-15% from today’s price. , should this bearish scenario materialize.
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