Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author
- ETH was in a bearish structure at press time.
- Further plunge could be possible if BTC breaks below the $21,000 zone.
Ethereum [ETH] The dive could extend if the $1,540 support does not hold. However, additional short selling opportunities could be realized if such an extended price correction occurs.
Reading Ethereum [ETH] Price Prediction 2023-24
In other new developments, Joseph Lubin, co-founder of Ethereum and founder of ConsenSys, is reportedly confident that the US will not classify Ether as a security. This comes after the US SEC banned Kraken’s staking service in the United States.
Is an extended dive possible?
Source: ETH/USDT on TradingView
Since mid-January, ETH has fluctuated between $1,540 and $1,678. However, Bitcoin [BTC] missed the $22,000 zone, putting the altcoin king in a deep dive.
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ETH could break below its lower parallel channel boundary of $1,540.69 and aim for the bearish target of $1,408 in the next two days.
The decline could provide short-selling opportunities at $1,511.36, $1,470.54 and $1,408.98 if the $1,540 support fails to keep the dip in check.
However, a break above the $1,678 channel threshold would nullify the above bias. Therefore, short-sellers should place their stop-losses above this level. Such a rebound could lead the bulls to target the $1,800 zone. But the bulls need to clear the resistance at $1,716.37 to gain leverage.
The RSI was bearish on the 12-hour time frame chart and showed a rising divergence from the ETH price action, which indicated a possible weakening of the ETH market structure. But fluctuating demand, as seen by OBV (On Balance Volume), could further push ETH into its sideways structure.
ETH has seen a steady rally in recent weeks
Source: Santiment
According to Santiment, ETH has seen a steady build-up phase since mid-December 2022, as evidenced by increasing off-exchange supply.
The declining supply on the exchange confirms the demand for ETH during the same period. If the rallying trend continues, ETH could recover from the lower channel pattern boundary, canceling the bearish bias described above.
At press time, withdrawal transactions have decreased significantly, indicating that ETH inflows and outflows have decreased.
It means there was short-term selling pressure at the time of writing. If selling pressure increases due to the release of locked ether, around 14% of supply, due to the upcoming update in March, ETH could fall to the $1,400 zone.