The price of Ether is trading 25% above its eight-month low of $2,112 hit on Aug. 5. The second-largest cryptocurrency by market cap has been trending higher, increasing 13% in the past seven days.
Despite this performance, analysts believe that downside risk for Ethereum (ETH) remains a concern at this time.
“I don’t expect ETH to surpass $2,800-$2,900, but I do expect it to remain range-bound for part of August and September,” McKenna, the partner at Arete Capital, said. Written In a post by X on August 15th.
McKenna was referring to the volatility in ETH’s price following a recent drop in its price due to market maker jump trading that dumped the cryptocurrency and fears of a global economic recession. ETH hit a low of $2,112 on Aug. 5 and fell 21% before recovering to its current level of $2,651.
The analyst said that when Ethereum rose to $2,750 on Aug. 12, it encountered strong resistance from the supply-congested zone at $2,800. While the price is currently “trading close to this supply level,” McKenna said he isn’t very confident about buying more Ethereum from current levels.
“But ultimately, any move in the range below is buying value.”
Meanwhile, fellow analyst Peter Brant said Ether price action is showing two scenarios based on two chart patterns: a five-month rectangle and an ascending wedge. In the first scenario, ETH price rises above $2,960, indicating a perfect exit position for long positions.
The second view was that the rising wedge would continue the downtrend and Ether would fall to the Rectangle’s bearish target of $1,650.
“Ethereum Funding Rate and Price Decline Suggest Bearish Turn” said Independent trader John Morgan said in an August 15 X post:
According to Glassnode data, Ethereum’s funding rate has often been positive since the beginning of 2024, suggesting bullish expectations. However, the recent price drop to $2,100 has been accompanied by a decline in funding rates, highlighting a shift in market sentiment.
Generally speaking, a negative funding rate indicates that short positions are benefiting long positions, indicating widespread bearish bets.
Related: Ethereum supply exceeds 120 million ETH due to surge in staking and re-staking
Ethereum Bearish Flag Predicts ETH Price to $1,640
Data from Cointelegraph Markets Pro Trading View ETH price fell 35.5% from a high of $3,400 on July 29, dropping to a low of $2,116 on August 5. The price has since recovered to $2,552.
Despite the recovery, bearish flags are visible on the daily chart, indicating a continuation of the downtrend.
Ethereum bulls are looking for support from the flag lower limit at $2,540. If the daily candle closes below this level, it will signal a bearish breakout from the chart formation and predict a drop to $1,640. Such a move would represent a 35.82% drop from the current price.
The Relative Strength Index (RSI) at around 37 also indicates that market conditions are still trending downwards.
This article does not contain any investment advice or recommendations. Any investment or trading involves risks and readers should conduct their own research when making any decision.
