With a channel breakout rally struggling to cross $2500, sellers are laying the groundwork for a reversal. The evening star pattern forming in the weekly chart warns of a deeper pullback. In case of a breakdown under the $2400 mark, the sellers can retest at $3000.
Following the bearish end of last week, the selling pressure rolls on this week with a 1.26% intraday fall in ETH Price. Setting a bearish tone to this week, the sellers are preparing a market-wide takeover with a significant drop back in altcoins.
Further, despite the recent DeFi TVL amount reaching the $57 Billion mark, Decentralized Finance is reviving.
Despite such recovery in the DeFi world, the technical chart for Ethereum signals a serious pullback warning. In such times, looking at long-term predictions like our ETH price prediction could help avoid short-term waves in the market.
Sellers Undermine The Ethereum Channel Breakout
Source – TradingView
Crossing the overhead trendline with an 11% growth in the second week of 2024, the ETH price reached the peak of $2717. However, the overhead supply with the market pullback led to a quick fall in Ethereum prices.
Moreover, with the sellers taking over the market amidst GBTC outflows, the altcoins are facing a dire threat. Hence, the weakening in the bullish trend warns of a negative cycle restarting in the rising channel.
Currently, the ETH price trades at $2423 and teases a strong reversal possibility, threatening the $2000 breakdown.
Hence, the buyers can find the $2400 breakdown as a selling opportunity, as the negative cycle can result in a 17% drop to $2000. On the flip side, if buyers can prevent the evening star, upside continuation can result in the $2500 breakout. Optimistically, the breakout run can reach the $3000 mark.
Technical indicators:
MACD indicator: The weekly MACD and signal lines are continuing the bullish trend amidst the pullback warning by the candlestick pattern.
ETH Price Under Short-Selling Pressure
As per Coinglass, most of the Ethereum traders are shorting at the current market price and the trend is growing over days. Following the dip on 12th January, the Long/Short Ratio shows growing pressure from sellers.
Currently, the LSR ratio at 0.9346 shows 51.69% short positions in Ethereum on a 24-hour chart.
Sohrab Khawas
Sohrab is a passionate cryptocurrency news writer with over five years of experience covering the industry. He keeps a keen interest in blockchain technology and its potential to revolutionize finance. Whether he’s trading or writing, Sohrab always keeps his finger on the pulse of the crypto world, using his expertise to deliver informative and engaging articles that educate and inspire. When he’s not analyzing the markets, Sohrab indulges in his hobbies of graphic design, minimal design or listening to his favorite hip-hop tunes.
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