Ethereum price might be at the rally’s precipice and might come crashing down in case the investors continue booking profits while others began panic-selling. If that were to happen, ETH might revisit the May 19 lows.
Since the May 19 swing low at around $1,850, the price of Ether has rallied by about 53% or nearly 65% from the May 23 trough at $1,730. The speedy recovery might be undone since it is threatened with the Momentum Reversal Indicator’s (MRI) preemptive cycle signal that is evident on the 6-hour chart.
The technical formation indicates that a continuation of the uptrend may result in a reversal signal that predicts a one-to-four candlestick correction. Multiplying ETH’s woes in the 50 six-hour SMA ($2,994) driving below the 100 six-hour SMA ($3,289) will create a bearish crossover. The development indicates that the near-term selling momentum is surging faster.
In the future, investors can expect that the smart contract token will correct by about 25% to retest the demand barrier’s upper boundary at $2,153. In case the ask orders continue to increase, Ethereum may retest the May 19 lows of $1,850.
Adding credibility to this bearish market overview is an 11% drop in the number of whales that own between 1,000,000 to 10,000,000 ETH. Notably, this segment of investors was majorly offloading their holdings as ETH price neared $4,000 in the second week of May. Three of these whales have already reallocated their funds or booked profits since May 9.
The surge of the amount of ETH available on various exchanges also increases the case for this grim market outlook. From May 19 to date, ETH on the exchanges has increased from 20.81 million ETH to 21.42 million ETH. This 3% increase indicates that traders and investors on these centralized firms are not optimistic about the performance of the biggest altcoin and may sell at any given time.
Generally, Ethereum price shows increased bearishness and may be due to a crash. Nevertheless, in case the bid orders surge, setting up a higher high as a result of a 6-hour candlestick near $3,117 might alleviate the pessimistic outlook shown in the market data and charts.
In case the bulls maintain the Ethereum price above $3,289, the bearish momentum will get invalidated. Under such conditions, ETH might gain 4% to reach the May 19 highs at $3,442.