A high correlation between ETH and BTC and a spot price below the 200-day MA suggest the dominance of bearish sentiment. The buying side of derivatives has fallen in the macro trend since mid-July, so any recovery in the short term may fail.
After struggling to defend its USD 1,200 level for a long time, Ether (ETH) dropped briefly before rallying to USD 1,343. That price action highlights the relevance of demand for the second-largest cryptocurrency below support at USD 1,200.
Daily Technical Analysis of the Price of Ether
The recently announced Crypto Price Index (CPI) for September 2022 caused volatility in the crypto market. However, it has recovered, taking Ether to the 200-week moving average again. Considering the 61.8% Fibonacci level at USD 1,210, it might be crucial to defend that level.
Amid a bearish trend, the probability of correction will continue if the price of Ether drops below USD 1,200 again. While the market struggles with that level, the number of buy orders will increase and weaken buyers. The price might test the psychological USD 1,000 level if that level fails.
In addition, negative sentiment will decrease if the price reclaims the horizontal level at USD 1,400. In that context, the value of Ether might also end the ongoing bearish trend soon.
There has been a high correlation between Ether and Bitcoin over the last 23 days. The spot price is trading below the 200-day moving average (MA), suggesting the dominance of bearish sentiment in the market. Besides, the range between 0.0645 BTC and 0.0663 BTC seems to be a significant support area. If Ether drops below, the market may experience another correction, leading to additional support at around 0.06 BTC.
Sentiment Analysis of the Price of Ether
The 14-day simple moving average (SMA) is the ratio of the purchase volume divided by the sales volume. Values above 1 indicate the dominance of bullish sentiment, while values below 1 show the prominence of bearish sentiment.
Data from CryptoQuant indicate buyers usually execute sell orders since the index is below 1. That metric rose above that level briefly in early October, but the buyers could not maintain positive momentum.
According to a chart, the buying side of derivatives market buyers has fallen in the macro trend since mid-July. Therefore, recovery in the short term might fail until the direction of the macro trend changes direction.
Ether is trading at around USD 1,285 and has accumulated a 0.4% gain over the last 24 hours. While its daily trading volume is above USD 5.72 billion, its market capitalization is about USD 154.59 billion, according to CoinGecko.
Investors should research cryptocurrencies like Ether before buying them to know their all-time high, behavior, and possible future price. That will allow them to find the most convenient investment opportunity to minimize the risk of losing their money. It is a matter of time before seeing how the market influences the price of the second-largest cryptocurrency.
By Alexander Salazar
