Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- The market structure was bearish, but the lack of volatility persisted.
- Ethereum’s recent price action was capped by resistance near USD 1880 and support near USD 1750.
In the past month Ethereum [ETH] has lost nearly 15.2% in value measured from the swing high at $2141 to the market price at the time of writing of $1816. This was extremely disappointing for some ETH bulls, who expected a strong rally after the breakout of the $2,000 mark in April.
Read Ethereum’s [ETH] Price Forecast 2023-24
The declining volume and compression on the price charts pointed to a quiet weekend. Will this be followed by a breakout to the north or south next week? Or, trading gods forbid, will Ethereum prices continue to stutter just above $1800?
Tight Bollinger Bands meant traders could wait for a sharp move to determine direction
Source: ETH/USDT on TradingView
The Bollinger Bands were closely tied to price and the BB width indicator was once again at a two-month low. Trading volume has also fallen in recent days. This came after ETH tested the 4-hour bullish order block in the USD 1720 (cyan) area. The RSI was also unable to break past the 45 or 55 readings, indicating an indecisive market.
Such depressing price action meant that a sharp move was just around the corner, but its direction was uncertain. On higher timeframes, such as daily, the ETH market structure has been bearish. The H4 bearish order block at $1880 could be tested before moving lower. Traders should also be wary of liquidity hunts in either direction ahead of a reversal.
Therefore, Monday’s highs and lows could be vital on the lower time frames. A strong bearish outing on Monday could set the tone for the rest of next week, with bearish targets at $1700 and $1620. On the other hand, a breakout past USD 1880 and a successful retest as support could push ETH bulls towards USD 2000 again.
The rising average coin age has been at odds with recent exchange rate inflows
Source: Sanitation
The measure of social dominance at the end of April was close to the three-month average. In the past three weeks, it fell to March lows before recovering. Still, the price action hovered around the $1820 area last week.
How much are 1,10,100 ETHs worth today?
The exchange flow balance showed that there was a peak in exchange inflow on May 19 with a positive balance of 71.8k ETH. An increase of similar magnitude last occurred on May 6, right after prices began to fall from $2,000.
Meanwhile, the average coin age has moved up over the past month. The exchange rate balance indicated that a rise in selling pressure was imminent, but the average coin age underlined an accumulation phase. Whether the bulls or the bears will win remains to be seen as Monday is likely to be important.
