As Ethereum (ETH) tests the $3,500 threshold amid a broad market downturn, CryptoQuant analyst ShayanBTC warns that the cryptocurrency could experience steeper declines if current futures market trends persist.
Ethereum’s Market Performance
Recent market turbulence has pushed multiple altcoins to their lowest levels in weeks, with Ethereum notably dipping to the lower end of the $3,500 range, hitting a low of $3,503 earlier today. This marks the first time in over three weeks that ETH has reached such levels, bringing a sense of investor anxiety back to the market.
Bearish Sentiment in the Futures Market
Futures market data indicates a bearish sentiment among traders, with many betting on further declines and ongoing market volatility. ShayanBTC, in a recent analysis, highlighted the importance of the Taker Buy Sell Ratio, a metric that gauges buyer versus seller aggressiveness in the futures market. A ratio above one suggests buyer dominance, while a ratio below one indicates seller dominance.
Declining Taker Buy Sell Ratio
The seven-day moving average of the Taker Buy Sell Ratio has been on a downward trend, failing to rise above one. This indicates that sellers are currently more aggressive in the futures market, contributing to the bearish outlook. ShayanBTC suggests that this declining ratio is a bearish signal, pointing to the potential for continued downward pressure on Ethereum’s price if the selling trend persists.
Derivatives Market Activity
Despite a significant 131% spike in derivatives volume to a record $24.8 billion, Ethereum’s long/short ratio—which measures the proportion of long (bullish) versus short (bearish) positions—has seen a sharp decline. According to Coinglass data, the ratio has dropped to 0.8921, indicating a dominance of short positions.
Current Ethereum Price and Moving Averages
Ethereum is currently trading at $3,537, showing a slight recovery from the earlier low of $3,503. Despite a 3.58% drop today, ETH remains above the 200-day Exponential Moving Average (EMA) at $2,945 and the 50-day EMA at $3,381.
Conclusion
The current bearish trends in the futures market, coupled with aggressive selling behavior, suggest that Ethereum could face further declines if these conditions do not improve. Investors and traders are advised to monitor these market indicators closely to gauge potential future price movements.
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