Ethereum wicked below the $1,530 price level. The wick indicates that the buyers showed up there and absorbed the selling pressure and they are still in the process of driving the price back. That candle wick by itself is by far the most significant piece of information on this whole chart.
Everything above that mentioned level is the April consolidation box that is marked between $2200 and $2500 with the yellow structural line at $2273, the blue resistance shelf at ~$2460, and months of side grinding as the market participants considered this more of an accumulation. All of that got cleaned out in the time period of under 2 weeks of this month selling.
Now the asset is sitting at $1,678 and has risen 3.5 percent as shown by the daily candle, and meanwhile every noteworthy moving average stands overhead.
What does this correction means for positioning in Ethereum
In the time period of just ten trading days, the asset has moved $750 starting from $2,273 to $1,530 and called it a liquidity flush.
Longs were kept on building from the price ranging from $2,200 to $2,500 and that made the asset long/short ratio be in the overload stage. As a result, the floor broke down and stops triggered that cleared the resting liquidity. Funding flipped negative, and the shorts started to scale in. Trapped long participants already did the work and there was no heavy reliance on the bears.
The structure of the market suggests that it is broken down, as shown by the SMA 30 at $1,986 and the SMA 200 at $2,432. Ethereum is changing hands at approximately $750 lower than the 200-day moving average. If we discuss the healthy market, this behavior is not the usual trend. Such behavior usually takes place when there is broken market sentiment or structure or even a combination of both.
$1,530: Ethereum’s level that actually bought time
It wasn’t random that the price of the asset found an interest at the $1530 level. This level can be termed more of a drawn-out past support level. This underlying significant historical price action pushed the buyers and the short covering in at the same time, and this explains why the wick was formed as the bulls took over the price control, making this level important.
The confidence from the bulls make sense but one wick doesn’t flip the structure; it just buys more time. THe next important thing to note is that the resistance test is the deciding factor. If the asset makes it as a deviation structure and reclaims the support, then it is a win situation for the bulls, and this push can be termed a successful start. In the other case it’s just better entries for the shorts.
RSI is in the oversold territory
Considering the momentum indicators like RSI 7, 14, and 21 are all showing figures below 30. RSI 14 is showing a figure of 25, which is the oversold reading. The usual meaning of the oversold RSI is linked with the bounce for the relative asset and is coupled with buying the fear. But this time, it seems incomplete as it reflects that the market is moving fast in one direction and in this case, it is to hunt down the unmitigated liquidity.
Ethereum has been hitting lower lows since February; the MACD histogram is still on its descent into negative at -22.58, and we have not witnessed any signal line cross yet with no momentum turnover. The momentum is diminishing and in the times of a broken structure, slowing down momentum essentially means the following leg down is taking longer to start.
The Fibonacci Levels That Actually Matter
The Fib retracement drawing ranging from $1,506 and $2,339 shows that the 78.6 percent Fib sits at $1,684 and right where ETH is now trading; that’s clearly not a coincidence. All traders that bought between $1,900 and $2,200 are currently at a loss, and this is their chance to exit and this makes the bounces die faster.
The important sequences are the $1,629 pivot support holds or the $1,530 retest opens up; $1,824 is the first real wall where the missed breakdown sellers will pile back in. $1,923 is the point of exhaustion for the short-covering bounce and $2,021 is the only level where the story gets rewritten. Above $2,021 ETH is involved in just making a range and below $2,021 the asset is only a downtrend with decent candles.
