Ethereum risks ‘bull trap’ after 25% ETH price rebound

MinersGarden
Ethereum risks 'bull trap' after 25% ETH price rebound
Fiverr


Ethereum’s token Ether (ETH) could be entering a “bull trap” zone after rebounding back above the $1,000 mark from 18-month lows of $885. 

Ether price paints a “rising wedge”

The first among these indicators is a “rising wedge,” a classic bearish reversal setup that forms after the price trends upward inside a range defined by two ascending but converging trendlines. The wedge setup gains further confirmation if the trading volume drops alongside the rising prices.

Theoretically, a rising wedge resolves after the price breaks below its lower trendline and eyes a run-down toward the level at length equal to the maximum height between the wedge’s upper and lower trendline

Ether has been forming a rising wedge since mid-June, as shown in the chart below.

Ledger Nano X - The secure hardware wallet
ETH/USD four-hour price chart featuring ‘rising wedge’ setup. Source: TradingView

Hence, its interim bias appears to the downside, with a decisive breakdown below the lower trendline risking a decline toward the $870–$950, depending on where the breakdown begins. 

That means a 15%–25% decline from June 13’s ETH price.

$70M exits Ethereum funds

Ethereum’s bearish case is supported by evidence of significant outflows from investment funds.

Notably, Ether-related investment products witnessed outflows worth $70 million in the week ending June 17, according to data fetched by CoinShares.

Notably, this was the eleventh-straight week of capital withdrawals, bringing the year-to-date outflow total to $458.6 million.

Flow of Asset. Source: CoinShares

In contrast, Solana (SOL), one of Ethereum’s top rivals in the smart contracts ecosystem, attracted $109 million in 2022 for its related funds. While Bitcoin (BTC) saw $480 million flow into its investment products.

Related: DeFi Summer 3.0? Uniswap overtakes Ethereum on fees, DeFi outperforms

CoinShares cited investors’ worries over Ethereum’s “Merge” to proof-of-stake as the primary reason behind its funds’ poor performance this year.

Ethereum options strike price: $1K

ETH options’ open interest on Deribit shows over $1 billion in notional for Ether, awaiting the expiry on June 24. Interestingly, these Ether options are major puts around the current price levels, with a concentration around the $1,000 strike, according to data from Coinglass.

Ether options open interest by strike price. Source: Coinglass

The June 24 expiration could potentially influence Ether’s price action, primarily because it trades only 10% above the preferred strike price of $1,000. Additionally, a move toward $1,000 could trigger the rising wedge setup. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.



  • Bitcoin
  • Ethereum
  • Tether
  • Dogecoin
Scan to Donate Bitcoin to 14dNrgxvkPsmFNUSW1h2Qit8ox5AioJpNc

Help us! Donate any amount of Bitcoin to this address

Scan the QR code or copy the address below into your wallet to send some Bitcoin

Scan to Donate Ethereum to 0xe925df5a97c85f2d52547bace18feca6e0bfa6cc

Help us! Donate any amount of Ethereum to this address

Scan the QR code or copy the address below into your wallet to send some Ethereum

Scan to Donate Tether to 0xe925df5a97c85f2d52547bace18feca6e0bfa6cc

Help us! Donate any amount of Tether to this address

Scan the QR code or copy the address below into your wallet to send some Tether

Scan to Donate Dogecoin to D9tRctXqnQeqSKFBzWeHFHCwTu7rcRE4XQ

Help us! Donate any amount of Dogecoin to this address

Scan the QR code or copy the address below into your wallet to send some Dogecoin



Source link

Coinmama

Be the first to comment

Leave a Reply

Your email address will not be published.


*