Over the weekend, Ethereum’s bullish momentum has been slowing down. While Ethereum broke the $1,700 critical resistance level, it may be able to retest support levels previously before recovering higher levels.
Wu Blockchain says Ethereum has been recently added to their list. surpassedBitcoin as Open Interest (OI), for option contracts. This metric stands at $5.6 billion as opposed to BTC’s $4.3 billion.
For the first time since the inception of these products, ETH’s price beat BTC’s open interest. Wu Blockchain observed that the vast majority of OI on Ethereum option contracts was calls (buy), and concentrated in September 30th, December 30, respectively.
These are the dates post-merge. It is an event that Ethereum has been anticipating. “The Merge” has been tentatively set for mainnet by September 9Th.
This will end ETH migration, which was previously a Proof-of-Work and Proof-of-Stake agreement. Options market players seem to have a favorable position or are willing to hedge against short-term positions by using other investment products.
An alternative perspective on the price of Ethereum
Data from Material Indicators accurately predicted the short-term selling pressure with the potential for an increase in volatility on yesterday’s essential daily, weekly, and monthly candle close. These events often promote sudden moves in an asset’s price.
As seen below, Material Indicators’ Trend Precognition Indicator flashed a short signal at yesterday’s daily close. It indicated that Ethereum was likely to trend towards the downside.
Technical resistance at 100-day moving averages (DMA) coincided with this selling pressure. The level rose with an increase of asks orders, as Ethereum prices trended up over the past 2 days.
At the time of writing, ETH’s price still records $13 million in asks (sell) orders at $1,700. This means that the critical resistance level at $1,700 will be maintained for now.
This shift in momentum for ETH’s price, as supported by Material Indicator’s trend precognition and asks liquidity, might translate into more persistent downside price action. The following analysts suggested a bearish scenario regarding Ethereum in the coming months.
The fractal or price forecast below shows ETH’s price might trend downwards until at least October 2022. Although these models can be unpredictable, they could give traders insight into the direction of the price in very short time periods.
On the latter, analysts from Material Indicators said the following highlighting how this data provides a different take on the current ETH’s price narrative away from the migration to a PoS consensus:
I don’t recommend trading fractals or taking them too literally as they can deviate in both price range and time or invalidate anytime. That said… All of the above elements paint a very compelling story for #ETH based purely on algos and TA without any of the POW (Proof-of-Work) –> POS (Proof-of-Stake) chatter
