Ethereum Triggers Correction Toward $1,900 – Will Bulls Support ETH Price Further?
As the sun rose on the global crypto market, Ethereum, the world’s second-largest cryptocurrency by market capitalization, found itself in an upward correction mode. After a period of bearish rally, Ethereum has begun a correction phase, with its price inching towards the $1,900 mark. As Ethereum faces a market correction, the focus is on the bulls’ ability to prevent further price drops. This phase could potentially set the stage for Ethereum to break the $2,000 barrier.
Traders Are Bullish Toward Ethereum
CryptoQuant data reveals a correlation between Ethereum’s price movements and its trading volumes on decentralized exchanges (DEX). Since January, there’s been a rise in ETH transactions on DEX platforms. In March, when the SEC sanctioned centralized exchanges, DEX trading volumes peaked, coinciding with an ETH price surge.
However, DEX volumes have since fallen, potentially indicating a bearish trend. While a correlation exists, it doesn’t imply direct causation, as other factors also influence ETH’s price.
Despite various influences, traders maintain a positive stance on ETH, as evidenced by the decreasing put-to-call ratio. This ratio, a measure of options trading activity, signifies a bullish market sentiment when it declines.
It compares the number of put options, which are bearish bets, to call options, which are bullish bets. A lower put-to-call ratio suggests that fewer traders are betting against ETH, indicating a more optimistic market outlook.
Another factor contributing to traders’ bullish behavior could be the decreasing Implied Volatility. A drop in implied volatility suggests that traders expect less market uncertainty and fewer price fluctuations, often interpreted as a sign of reduced risk and a more stable market.
What’s Next After $1,900?
The extended wick on Ethereum’s candlestick indicates that buyers bought heavily near the dip of $1,800. ETH price has made a notable surge and currently attempts to break above the EMA100 on the 4-hour price chart. However, bulls are strongly defending a surge as a breakout above $1,900 will see a spike in short liquidation. As of writing, ETH price trades at $1,871, surging over 0.4% from yesterday’s rate.
The flattened moving averages and the relative strength index (RSI) near the midline suggest an equilibrium between supply and demand. If the ETH price breaks above $1,927, bulls will again induce buying pressure to send the price toward $1,975, where bears might put up a strong fight.
On the other hand, a severe downturn might be on the horizon if the ETH price fails to hold momentum above the critical support line of $1,820. A decline below this level will strengthen short-position holders’ confidence, and ETH price could touch the bottom level near $1,650-$1,700.
