Ethereum Faces Selling Pressure Following Dencun Upgrade: Where is ETH Headed?

Ethereum (ETH) Gears Up for a Potential Rally to $3,000; Here's When
Source: CNN

Ethereum has encountered resistance in maintaining its position around the $4,000 level following the successful deployment of the Dencun upgrade at 1:55 PM UTC on March 13.

The much-anticipated hard fork, designed to reduce transaction fees on layer-2 networks and improve Ethereum’s overall scalability, has triggered a selling wave, causing the price of Ethereum to dip below key Fibonacci retracement levels and lose the crucial $4,000 milestone.

The current market sentiment for Ethereum is shifting towards a bearish outlook, as various on-chain indicators suggest a potential further downturn in its price. This shift in sentiment comes nearly a year after the Shanghai upgrade in April 2023.

Ethereum drops below $4,000

Data from IntoTheBlock shows a notable change in the netflow metric for Ethereum, with trading volumes reaching 85.29K ETH. This indicates that the amount of Ethereum moving into exchanges is currently higher than the amount moving out, leading to an increase in reserves on these platforms. The accumulation of Ethereum on exchanges suggests that there may be a potential for a downward price movement in the near future.

Moreover, the one-month call-put skew for Ether, which reflects market sentiment in options trading, has turned negative, signaling a preference for put options that protect against price drops. This trend is also observed for the 60-day period, although the 90-day and 180-day outlooks remain positive, according to Deribit data tracked by Amberdata.

QCP Capital observed a minor decrease in ETH spot-forward spreads, which is in contrast to the wider spreads observed in Bitcoin markets. This suggests that if ETH prices were to experience a substantial decline, it could result in tighter forward spreads as leveraged long positions are liquidated.

After the recent selling pressure, buyers were unable to sustain the ETH price within a buying demand zone, as sellers strongly defended the $4,000 level. As a result, the ETH price dropped below immediate Fibonacci channels and fell below the important $4,000 milestone. However, buyers are still accumulating during pullbacks and defending the support lines.

Leave a Reply

Your email address will not be published. Required fields are marked *

Previous Post
Shiba Inu Team Member Makes Highly Anticipated Announcement Regarding Shibarium

Shiba Inu Insider Boldly Calls for $0.01 Despite Ongoing Struggles

Next Post
Solana Rebounds to $100, But SOL Faces Bearish Pressures

Solana (SOL) Soars to New Heights: Key Metrics Reach All-Time Highs

Related Posts