The Ethereum (ETH) token may enter a bull trap after recovering above the $1,000 mark from an 18-month low of $885.
Ethereum Price Draws a Rising Wedge
First among these indicators is the Rising Wedge, a classic bearish reversal setup that forms after price moves up within a range defined by two rising but converging trend lines. The wedge setting gets further confirmation if the trading volume falls along with the rise in prices.
Theoretically, a rising wedge resolves after price breaks below its lower trendline and there is a move down to the level for a length equal to the maximum height between the upper and lower trendlines of the wedge.
Ether has been forming a rising wedge since mid-June, as shown in the chart below.
Therefore, its intermediate slope appears to be to the downside, and a decisive break below the lower trendline could lead to a decline towards $870-$950, depending on where the break begins.
This means a 15-25% decline from the price of ETH on June 13th.
$70M Leaving Ethereum Funds
Ethereum’s bearish sentiment is supported by evidence of a significant outflow of funds from investment funds.
Notably, Ethereum-related investment products recorded $70 million worth of outflows in the week ending June 17th. according to data received by CoinShares.
Notably, this was the eleventh consecutive week of capital withdrawals, bringing the total year-to-date outflow to $458.6 million.
In contrast, Solana (SOL), one of Ethereum’s top competitors in the smart contract ecosystem, has raised $109 million in 2022 for its tied funds. While Bitcoin (BTC) has invested $480 million in its investment products.
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CoinShares cited investor concerns about Ethereum’s “merger” with Proof-of-Stake as the main reason for the poor performance of its funds this year.
Ethereum option exercise price: $1,000
Open interest in ETH options on Deribit shows more than $1 billion in Ether, pending June 24th expiration. according to Coinglass data.
The June 24 expiration has the potential to impact Ether’s price behavior, primarily because it is trading just 10% above its preferred strike price of $1,000. In addition, a move towards $1,000 could trigger a rising wedge.
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Credit : cointelegraph.com