Ethereum Faces Correction Risks: Analyzing Future Price Movements

Ethereum faces potential corrections as selloff risks increase following comments from Federal Reserve Chair Jerome Powell, indicating no rush to lower interest rates. Liquidations show bearish pressure, with significant inflows contributing to selling risks. Positive indicators exist with approach to realised prices suggesting potential rebounds, though bearish momentum remains. Immediate support and resistance levels influence future price movements.

Ethereum is currently facing potential bearish corrections following Federal Reserve Chair Jerome Powell’s recent remarks. His speech highlighted a cautious economic approach with no immediate plan to lower interest rates, leading to increased Ethereum inflows on exchanges. This trend indicates heightened selloff risks for cryptocurrencies, including Ethereum.

The price of Ethereum has shown a declining trend amid Powell’s comments, negatively impacting investor sentiment. Recent data from Coinglass reveals approximately $40.6 million in liquidations for Ethereum, with long positions constituting around $26 million and short positions roughly $14.6 million. The increased liquidations signal growing bearish pressure on the asset.

Furthermore, Ethereum saw a substantial transfer of over 77,000 ETH to derivative exchanges, marking the highest single-day net inflow in months. This influx raises concerns regarding selling pressure due to the increased supply. Despite this, IntoTheBlock reports a negative Netflow of around -6,800 ETH, indicating that outflows are exceeding inflows as some investors accumulate during the price downturn.

Despite the market’s bearish tendencies, Ethereum’s open interest has increased by over 3.87%, exceeding $18 billion. However, the funding rate remains negative at 0.0015%, indicating that bears continue to dominate the market and ETH remains under consolidation with immediate Fib support levels.

Positive outlooks suggest a possible rebound as Ethereum’s trading price approaches its realized price of approximately $1,585, historically a significant buying level. Analysts note this could indicate a potential for major rebounds in the foreseeable future.

Currently, Ethereum’s recovery attempts are weakening at the EMA20 level, with the price hovering around resistance levels. Trading at approximately $1,588, a fall below $1,400 could lead to further declines towards $1,130. A significant influx of buying interest may occur at this lower threshold, however, continued bearish momentum could drive the price to $1,000.

On the upside, a breakthrough above $1,700 may indicate a shift in market control toward buyers, potentially leading to a rally towards $2,000. Although the 50-day Simple Moving Average (SMA) may impede immediate recovery, a strong push above $2,000 could signal a reversal of the current downtrend.