After a brief dip to $ 3,888, ETH quickly rebounded to $ 4,183 at press time. Indeed, ETH appears ready to retest the immediate resistance at $ 4,238. However, the possibility of corrections based on on-chain indicators should be considered.
Many factors can play a role right now, and these factors play an important role in determining the price direction for the largest altcoin on the market.
Source: TradingView
Currently, ETH’s price position is ready for a typical short after not breaking the resistance at USD 4,238. The crossover of the 20 MA and 20 EMA also appears to indicate declining pressure. This gives a better understanding of how the asset might react over the next few hours.
Regardless of the market structure, however, the on-chain indicators for the last 24 hours also seem to give a negative outlook.
Source: CryptoQuant
According to CryptoQuant, the leverage and open interest of ETH remain at all-time highs and will not be reset after the price correction. The initial downward move has been identified as over-leveraged markets, so current conditions inevitably signal surrender.
As for the number of active addresses, there was a bullish divergence between the price and the active addresses when the indicator hit a 3-week high on the chart.
The source: mood
However, there are some situations where price can react in the short term and it all depends on market dynamics.
Consistent with the observation above, ETH is likely to correct to USD 4,000, but a consolidation phase in the current range is also possible. With the current ups and downs, the market dynamics will be more divided between profit takers and hodlers, as the mood will be a bit distorted and unbalanced.
A strong upward move will be confirmed for ETH when the 4-hour candle closes positive above USD 4,238. However, the likelihood of this is very slim after the recent collapse. So wait for another retest at USD 4,000 as ETH will stabilize on this floor in a long-term bull cycle.
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