Ether Bears Grow Louder as Prices Remain Rangebound
- ETH price could decline to $3,500 if critical support levels are breached.
Ether (ETH) has been trapped in the $4,200-$4,500 range for the past two weeks, with a decline in both spot and institutional demand. This has led some traders to adopt a bearish outlook, anticipating that the ETH price might slip to $3,500 prior to any potential recovery.
The instability in Ether’s pricing, combined with Bitcoin’s recent fall below $100,000, has resulted in a shift in market sentiment, with “sell calls” becoming more pronounced, according to Santiment.
“Traders have changed their tunes, swinging more and more negatively with expectations of Bitcoin falling back below $100K, Ethereum back below $3.5K,” the market intelligence firm stated in an X post on Tuesday.
An accompanying chart illustrates a rise in terms like “selling” and “bearish” since late August, when Ether reached its all-time high of $4,950.
However, markets frequently move contrary to the prevailing crowd expectations, a situation that could potentially “signal an ideal buy time,” Santiment noted.
Ether’s spot demand has remained weak for two weeks, with ETH trading volume decreasing to $2.6 billion on Sept. 8 from $18.5 billion on Aug. 22, marking an 85% drop, as per data from Glassnode.
The decline in spot volume signifies fading investor participation, highlighting a lack of conviction among traders.
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While the spot Cumulative Volume Delta (CVD), which represents the net difference between buying and selling trade volumes for ETH, has seen a slight improvement as selling pressure has lifted, it remains significantly lower than the levels observed in late August.
Low spot volume along with negative spot volume delta points to weak demand for ETH, increasing price vulnerability. Nevertheless, bulls could regain their momentum if the CVD manages to stabilize.
As reported, institutional investors have stepped back, with spot Ethereum ETFs experiencing over $1.04 billion in net outflows across six consecutive trading days, adding to the selling pressure.
Currently, the ETH price is retesting the lower trendline of a symmetrical triangle at $4,280 in the daily time frame, based on data from Markets Pro and TradingView.
A daily candlestick closing below the triangle could invite more bears looking to drive the price down to $3,600, which is a 16% drop from the current level.
MN Capital founder Michael van de Poppe has suggested that the ETH price could decline toward the $3,500-$3,800 demand zone prior to a recovery.
Another analyst, Ted Pillows, pointed out significant liquidity clusters existing between $3,600 and $4,000, noting that Ether may initially drop to collect this liquidity before reversing.
$ETH has decent liquidity clusters around the $3,600-$4,000 level.
Ethereum’s price movement appears weak due to macroeconomic uncertainty and diminished ETF demand.
This article does not provide investment advice or recommendations. Each investment and trading move entails risks, and readers should perform their own research before making decisions.
