On May 20, the price of Ether (ETH) rose from $ 2,443 to nearly $ 3,000, an increase of 13.55%, according to Coinbase. The strong intraday upward movement occurred one day after the ETH price fell by 27.61%. In this way, Hopes have been raised that the second largest cryptocurrency by market capitalization would rebound in the coming days.
Even so, prices fell, leaving the impression that the upward trend in the Ethereum market recovered on May 20th It was just a “dead cat bounce” – a small, brief spike in the price of a falling asset that acts as a bearish continuation pattern even though it begins as a bullish reversal pattern.
On May 24th, the ETH / USD exchange rate painted a similar recovery candle. The pair rose nearly 20% to $ 2,474, following a 37% decline since the end of May 20. The strong uptrend indicated a further upswing of the dead cat, especially since the indicators on the chain showed a bearish outlook for ether.
The listing of Ether on the exchanges poses problems
Lex Moskovski, Chief Investment Officer of Moscow-based banking service Moskovski Capital, warned that total Ether entry on all exchanges hit an annual high of 199,947 ETH on Sunday.
In retrospect, many traders prefer to keep their tokens off the exchanges, away from the custody of the exchanges. Therefore, they only transfer digital assets to exchanges when they intend to sell them or exchange them for other tokens. Analytics portals track these capital flows to determine the short-term market distortion of traders.
The record inflow of ETH across all cryptocurrency exchanges, said Moskovski, is likely to hold the bulls back from their bullish bets.
“This is the biggest influx we’ve had this year,” he noted. “If it isn’t one [transacciÃ³n] internally, be careful. “
Conflict of Interest in the Ethereum Market
Last week, Traders sold their cryptocurrency holdings fearing Elon Musk’s Tesla would do the same.
The billionaire investor got into a Twitter feud with some top cryptocurrency numbers for the week leading up to May 19, ultimately suggesting that Tesla would drop all of its $ 1.5 billion BTC holdings. He later denied that claim by saying Tesla did not sell Bitcoin.
to???? Elon musk (@elonmusk) May 16, 2021
China has also fueled the sell-off in the cryptocurrency market by reiterating its intention to crackdown on digital currencies last week. Meanwhile, the U.S. Treasury Department also announced its plans to regulate larger cryptocurrency transactions, and Musk continued to post cryptic mixed signals.
Because of these updates, traders moved the major altcoin markets in a direction of 10% to 30% either way and pulled Ether into swing trading.
Ether price analysts also saw conflicting ETH / USD scenarios. A diagram shared by pseudonymous market expert Crypto Cactus. The pair was revealed to be at risk of plunge towards $ 1,700 if it falls below preliminary support around the $ 2,000 area.
“ETH is currently hovering around USDT 2,200, with USDT 2,400 being a short-term resistance level,” said Robbie Liu, researcher at OKEx Exchange. “In the meantime, ETH / BTC has not experienced a significant upturn.”
The data showed an increase in open interest (OI), indicating that investors are taking leveraged positions in the ether derivatives market after experiencing a long squeeze. over $ 1.87 billion on May 19. The total outstanding futures contracts increased from $ 5.1 billion to $ 5.7 billion in the past 24 hours.
Derivatives traders are mostly short ETH / USD, with their long / short ratio lurking at 0.98 at 12:00 PM UTC. Ether is currently trading 44% below its all-time high of $ 4,384.