Ethereum risks 'bull trap' after 25% ETH price rebound

1 week ago 10

Ethereum's token Ether (ETH) could beryllium entering a "bull trap" zone aft rebounding backmost supra the $1,000 people from 18-month lows of $885. 

Ether terms paints a "rising wedge"

The archetypal among these indicators is a "rising wedge," a classical bearish reversal setup that forms aft the terms trends upward wrong a scope defined by 2 ascending but converging trendlines. The wedge setup gains further confirmation if the trading measurement drops alongside the rising prices.

Theoretically, a rising wedge resolves aft the terms breaks beneath its little trendline and eyes a run-down toward the level astatine magnitude adjacent to the maximum tallness betwixt the wedge's precocious and little trendline

Ether has been forming a rising wedge since mid-June, arsenic shown successful the illustration below.

ETH/USD four-hour terms illustration featuring 'rising wedge' setup. Source: TradingView

Hence, its interim bias appears to the downside, with a decisive breakdown beneath the little trendline risking a diminution toward the $870–$950, depending connected wherever the breakdown begins. 

That means a 15%–25% diminution from June 13's ETH price.

$70M exits Ethereum funds

Ethereum's bearish lawsuit is supported by grounds of important outflows from concern funds.

Notably, Ether-related concern products witnessed outflows worthy $70 cardinal successful the week ending June 17, according to information fetched by CoinShares.

Notably, this was the eleventh-straight week of superior withdrawals, bringing the year-to-date outflow full to $458.6 million.

Flow of Asset. Source: CoinShares

In contrast, Solana (SOL), 1 of Ethereum's apical rivals successful the astute contracts ecosystem, attracted $109 cardinal successful 2022 for its related funds. While Bitcoin (BTC) saw $480 cardinal travel into its concern products.

Related: DeFi Summer 3.0? Uniswap overtakes Ethereum connected fees, DeFi outperforms

CoinShares cited investors' worries implicit Ethereum's "Merge" to proof-of-stake arsenic the superior crushed down its funds' mediocre show this year.

Ethereum options onslaught price: $1K

ETH options' unfastened involvement connected Deribit shows implicit $1 cardinal successful notional for Ether, awaiting the expiry connected June 24. Interestingly, these Ether options are large puts astir the existent terms levels, with a attraction astir the $1,000 strike, according to information from Coinglass.

Ether options unfastened involvement by onslaught price. Source: Coinglass

The June 24 expiration could perchance power Ether's terms action, chiefly due to the fact that it trades lone 10% supra the preferred onslaught terms of $1,000. Additionally, a determination toward $1,000 could trigger the rising wedge setup. 

The views and opinions expressed present are solely those of the writer and bash not needfully bespeak the views of Every concern and trading determination involves risk, you should behaviour your ain probe erstwhile making a decision.

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