ETH attempted to defend August low of $1550 in the past few days. Can the level stop bearish overtures?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- ETH lost hold of $1600 on 9 October and failed to reclaim it.
- Long positions suffered >$5 million in liquidations 24 hours before press time.
Bears overwhelmed markets after the September FOMC Minutes on 11 October. As a result, the increased bearish bets saw Ethereum [ETH] retest the August low of $1550.
In a previous ETH price prediction published on 9 October, AMBCrypto correctly projected that sellers could extend shorting gains to $1550 – An August low.
But ETH bulls attempted to defend the August low at press time. However, liquidation data at hand suggested the bullish defence of $1550 could be weakened.
Liquidity on price charts at $1600
The extended drop on 9 October left a price imbalance and liquidity on the daily chart at $1595 – $1616 (white). A D1 breaker blocker of $1623 – $1660 (red) sat right above the liquidity area. Collectively, the two marked areas could act as hurdles for bulls.
But overall, ETH’s price action formed a descending wedge pattern, a typical bullish formation. Unfortunately, the overhead hurdles must be cleared for ETH to reclaim $1700.
A crack below August lows ($1550) could shift focus to trendline support near $1516 or the daily bullish OB at $1400 formed on 10 March 2023.
The CMF was negative despite the attempted reversal, and other key price chart indicators, RSI and OBV, were negative. It meant capital inflows weakened, alongside a decline in buying pressure and Spot market demand for ETH.
More ETH long positions liquidated
Liquidation data from Coinglass indicated over $5 million ETH long positions were forcibly closed (liquidated) across major exchanges within 24 hours before press time. Over the same period, only $2.5 million were rekt, reinforcing a Futures market bearish sentiment.
So, ETH sellers could breach the August low if the bearish pressure persists in the next few days.
However, a recent report indicated that major ETH whales were buying the dip, which could influence a likely mid-October reversal.