Ethereum Market Dynamics Stay Bearish As Data Points On Chain To Capitulation
Ethereum’s price was shaken by the market decline on Monday, which caused it to lose the $1,900 support level again, causing speculation about its near-term market outlook. Following the reversal, investor sentiment shifts to a more cautious stance, maintaining its strong market momentum.
Bearish Momentum Persists in the Ethereum Market
Just as the broader cryptocurrency landscape has changed dramatically, Ethereum’s market power remains firmly tilted to the downside. Some of the indications of this condition include signs of capitulation on the other side the leading altcoin and network.
Joao Wedson, author and founder of the on-chain data analytics platform Alphractal, has light up in the current market condition of ETH after checking many metrics. Key indicators, such as realized/unrealized losses and declining demand metrics, point to an increasing number of investors exiting positions due to stress.
Data from Alpha AI shows that there is an increase in long positions while the Coinbase Premium Index shows a decrease. Long-term increases indicate that traders are betting that recent weakness will provide an opportunity for upward momentum and are preparing to retrace.
At the same time, on-chain data is a bright sign of capitulation. Current flows reflect defensive behavior by investors and declining confidence rather than new ones accumulation. Wedson also highlighted some key areas and metrics that reinforce this view of bearish market dynamics for ETH.
The first metric is Whale vs Retail Delta, which now shows that retail investors are positioned more on the long side. The Liquidation Level Heatmap shows the maximum potential in the system. ETH’s Open Interest (OI) has been shrinking, and working addresses continue to disappear.
The on-chain volume is a bright warning as it decreases, and NUPL is currently showing capitulation signals. Given these bearish signals, Wedson emphasized that the next decline could encourage the formation of a strong base. This means that Ethereum it may begin its accumulation phase in the short term.
Moving Back to the Lower Bollinger Bands
In the current market situation, The price of Ethereum seems to be moving in the same direction as the price of Bitcoin. According to to market analyst and investor Cantonese Cat, both cryptocurrency assets recently hit their lower Bollinger Bands as they contracted as support. However, the direction is not determined by the pressure of the Bollinger Band.
As a result, Cantonese Cat noted that the bulls may look for multiple sides to turn the 20-day SMA flat, which would bring a better chance to flip it as a support. In the meantime, the bears will be looking for more follow-through of the current price action and the lows that occur soon, but it hasn’t happened yet.
At the time of writing, the price of ETH was trading at $1,826 after falling 3% in the last 24 hours. Despite the declining price action, its trading volume has turned bullish again, rising more than 29% during the same period.
Featured image from Pixabay, chart from Tradingview.com
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