Ether is trading 25% above its eight-month low of $2,112 on August 5. The second-largest cryptocurrency by market cap is on the rise, up 13% over the past seven days.
Despite these achievements, analysts believe that there are still downside risks to Ether (ETH) for now.
“I don’t expect ETH to break $2,800-$2,900, but rather remain range bound for some time through August and September,” McKenna, a partner at Arete Capital, wrote in an August 15 post to X.
McKenna cited Ether’s recent price action following a recent drop due to market maker Jump Trading dumping ETH and concerns about a global recession. ETH fell as much as 21% before hitting a swing low of $2,112 on August 5, before recovering to its current price of $2,651.
According to the analyst, Ethereum, which soared to $2,750 on August 12, has encountered strong resistance in the $2,800 supply congestion zone. The price is currently “trading close to this supply,” and McKenna said he would not be very confident in longing ETH at current levels.
“But ultimately, the range activity below is about buying value.”
Meanwhile, fellow analyst Peter Brandt said that Ether’s price action presented two scenarios based on two chart patterns: a five-month square and a rising wedge. The first is that ETH price rises above $2,960, presenting a perfect exit for long positions.
The second view involves the ascending wedge pattern breaking down, continuing the downtrend, and Ether falling to the rectangle’s bearish target of $1,650.
“Ethereum’s funding rate and price declines suggest a bearish trend,” independent trader John Morgan wrote in a post on X on August 15.
According to data from Glassnode, Ethereum’s funding ratio has been positive since early 2024, suggesting bullish expectations. However, with the recent price drop to $2,100, the funding ratio has also declined, highlighting a change in market sentiment.
In general, a negative funding ratio indicates that short positions are paying for long positions, which is a sign that bearish bets are widespread.
relevant: Ethereum Supply Surpasses 120 Million ETH as Staking and Re-Staking Surge
Ethereum Bear Flag Expects ETH Price to Hit $1,640
According to data from Cointelegraph Markets Pro and TradingView, the ETH price fell from a high of $3,400 on July 29 to a low of $2,116 on August 5, a 35.5% drop. The price has since recovered to $2,552.
Despite the recovery, the daily chart shows a bearish flag indicating that the downtrend is likely to continue.
Ether bulls are looking for support at the lower boundary of the flag at $2,540. A daily candlestick close below this level would signal a bearish breakout in the chart formation, which would likely lead to a drop to $1,640. Such a move would represent a 35.82% decline from the current price.
A Relative Strength Index (RSI) reading around 37 indicates that market conditions are still bearish.
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.