Focus on the Dynamic Adjustment of the Triangular Consolidation

Summary:

Ethereum failed to break above the US$2,800 resistance level last week and gave back most of its gains. ETH prices follow a major bearish trend line with resistance near US$2,665 in the 1D timeframe.

BUY ETH-USDT

EXP

EXPIRED

2280.00

Entry Price

3023.00

2100.00

2449.95 +7.35 +0.30%

Pips

EXPIRED

2100.00

2534.18

Exit Price

2280.00

Entry Price

3023.00

Fundamentals

The cryptocurrency market experienced a downward trend last week, with a market capitalization decline of 3% over seven days, bringing it down to US$2.21 trillion.

Ethereum's inflation rate has risen to its highest level in two years, reaching an annual rate of 0.74%, raising concerns about the deflationary prospects of cryptocurrencies and their status as hard currency, as concluded by Binance. The shift of network activity towards L2 has resulted in a decrease in the number of underlying transactions and a lower token burn rate.

According to SoSoValue, there was a total outflow of US$301.5 million from U.S. spot Bitcoin ETFs last week, following three consecutive weeks of inflows. Since the approval of the BTC-ETF in January, the total inflow has decreased to US$18.5 billion. Meanwhile, the Ethereum ETF experienced a net outflow of US$30.7 million last week, with the total since the product's approval rising to US$553.7 million.

Binance continues to cede its market dominance. CCData reports that Binance's share of total trading volume in the CEX spot and derivatives markets has dropped to 36.6%, marking its worst performance since September 2020.

However, it is noteworthy that since last Friday, a resurgence of positive sentiment has emerged, as buyers found Bitcoin appealing around US$60,000, and began significant purchasing.

Despite the cryptocurrency fear and greed index currently sitting at a neutral position, moving away from the fear zone, Ethereum remains under pressure, trading below its 50-day SMA. On the bright side, Ethereum still shows momentum towards confirming a bottom. Last week, the second-largest cryptocurrency received support at the 200-week SMA, a level it has repeatedly bounced off since mid-2012, indicating a favorable sign for long-term buyers.

Focus on the Dynamic Adjustment of the Triangular Consolidation_1

Technical Analysis

Ethereum is currently striving to break through the critical neckline of US$2,521 during today's rebound while correcting its gains. However, a rejection pattern has emerged among the bulls, indicating that Ethereum may still experience some downward movement, necessitating a retest of the range's bottom.

In the 1D timeframe, the price has once again fallen below the 50% Fibonacci retracement level between US$2,560 and US$2,078, suggesting that the downtrend is likely to persist. The next major support level is near US$2,250; a break below this support could see the price decline towards the lower edge of the triangular consolidation at US$2,196. If the price falls further and breaks the low from August 4, the subsequent bullish momentum would be lost.

On the upside, bulls will aim to fluctuate higher, relying on the lower edge of the triangular consolidation. The initial resistance is at the supply zone of US$2,635, with the next resistance level at the upper edge of the triangular consolidation at US$2,665. A breakout above US$2,731 would indicate that upward momentum is being established.

Trading Recommendations

Trading Direction: Buy

Entry Price:2280

Target Price:3023

Stop Loss:2100

Deadline: October 23, 2024 23:55:00

Support: 2352, 2310, 2242

Resistance: 2521, 2635, 2665

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