Ethereum trading at $1,755 registers an intraday pullback of 2.25%. This marks a sudden stop to the prevailing bullish recovery as the biggest altcoin fails to sustain above the $1,800 mark.
With the intraday pullback, the sudden supply surge on the exchanges, and the continuous outflows in the Ethereum ETF market, a steeper correction is expected. Amid such conditions, is Ethereum bound to retest the $1,300 mark? Let’s find out.
Ethereum Faces Rejection at $1800
In the daily chart, the Ethereum resistance showcases a bullish breakout of a short-term resistance trendline. This propels a new positive cycle within a descending channel pattern.
However, the uptrend fails to reach the 50-day EMA line as Ethereum faces overhead rejection from the $1800 mark. This warns of a bearish extension due to the prevailing bearish trend.
The bearish trend is highlighted by the declining trend in the 50, 100, and 200 EMA lines. However, the short-term recovery has led to a positive cycle in the MACD and Signal lines.
Furthermore, positive histograms in the momentum indicator continue to surge. Despite the short-term surge in bullish momentum, the intraday pullback reflects massive overhead supply, changing the dynamics.
With the new bearish candle undermining the previous-day recovery, the downfall in Ethereum is likely to begin. Based on the short-term price analysis, a bearish turnaround will likely detach the $1600 mark, followed by the previous swing low at the near $1400 level.
On a bullish trend, a breakout rally above the 50-day EMA and the descending channel will propel Ethereum towards the 200 EMA line near the $2500 level.
Rising Supply on Exchanges Warns Major Crash
As a bearish possibility in the Ethereum price trend increases, Ali Martinez, a cryptoanalyst, highlights a shift in the exchange reserves of Ethereum. As per the analyst, the CryptoQuant data highlights the exchange reserve of Ethereum rising to 19.66 million ETH.
This highlights a significant rise of 305,000 ETH in the past week. With the increasing supply, the chances of a potential selling spree of Ethereum increase.
Institutions Sleep on Ethereum as Bears Take Control
The institutional support for Ethereum has yet to resurface despite the positive recovery in the market. On April 23, the daily total net outflow of the Ethereum ETF stood at $23.88 million.
Driving the outflow, BlackRock dumped $30.28 million in the market, despite the $6.40 million worth of inflow by the Grayscale Mini Ethereum Trust. As the Ethereum ETFs witnessed a continuous streak of 9 consecutive net negative weekly flows, the lack of institutional support fails to hold the incoming supply.
