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Ethereum short-term gains wiped out: Can bulls prevent further plunge

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

Ethereum [ETH] dropped below its $1,600 mark after Bitcoin [BTC] lost the $23k zone. BTC sharply declined on 24 January, moving below $22.5k and pulling down ETH to $1,518.

At press time, ETH struggled to break above $1,560 as BTC hovered below the $22,800 level. Therefore, BTC’s loss of traction and velocity could force ETH into a short-term range before bulls attempted to target the green zone.

Read Ethereum’s [ETH] Price Prediction 2023-24

Source: ETH/USDT on TradingView

ETH fronted an extra rally around 14 January, despite signs of slowing momentum. The price action carved a rising channel (yellow) in the same period.

The altcoin broke below the channel but found steady support at $1,511. The ensuing recovery faced rejection at $1,678, followed by a slight consolidation before a major drop on Tuesday to the $1,500 region.

On the 12-hour chart, ETH’s Relative Strength Index (RSI) declined and was 52, showing a mild bullish momentum that was close to a neutral market structure. Similarly, the On-Balance Volume (OBV) declined, undermining a strong uptrend momentum for the King of the altcoin market.

Therefore, ETH could fluctuate in the $1,540 – $1,560 range in the short term before attempting a retest of the $1,600 zone in the next couple of days/weeks. In addition, a move to the $1,700 zone could be possible if BTC moves beyond $23K, especially if next week’s FOMC announcement triggers the markets positively.

However, a drop below $1,511 would invalidate the above bias. Such a plunge could see ETH settle at $1,471.

Source: Santiment

Is your portfolio green? Check out the ETH Profit Calculator

According to Santiment, ETH’s Exchange Flow Balance was negative at press time. It shows more ETH flowed out than into the exchanges, indicating that a short-term accumulation occurred at the time of publication.

However, the stagnant active addresses in the past 24 hours show that trading volume remained unchanged, undermining a strong price reversal. Therefore, short-term accumulation and stagnant trading volume could force ETH into a price consolidation within the $1,540 – $1,560 range in the next few hours.

Source

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