Analysts Fear Further Downside Despite Ethereum’s Recovery from Overnight Dip
- Ethereum has seen some immense bullishness throughout the past 24-hours, with the crypto breaking free from its range-bound trading in the $700 region and rocketing past $1,000
- Where the entire market trends in the mid-term may depend largely on whether or not Bitcoin can maintain its foothold in the lower-$30,000 region
- If the crypto can hold above here and consolidate, it could provide ETH and other altcoins with further room to rally in the days and weeks ahead
- One trader is noting that Ethereum may be in a precarious position at the present moment
- He is pointing to high predicted funding as a reason why it may see further downside
- It also appears that it was rejected from its weekly supply EQ overnight
Ethereum has gained some parabolic momentum over the past could of days, which has put a firm end to the phase of consolidation and underperformance against BTC that previously plagued its price action.
The cryptocurrency is now back above $1,000 following an immense rally and rejection seen overnight, and bulls are trying to build a strong base of support here.
It remains unclear whether or not the cryptocurrency will ultimately hold above this level, as analysts are widely noting that high funding and the heavy presence of leverage in the market are currently negative signs.
Ethereum Rallies Above $1,000 Following Overnight Rejection
At the time of writing, Ethereum is trading up just over 7% at its current price of $1,050. This marks a notable upswing from recent lows of $720 and a slight decline from daily highs of $1,170.
Where the market trends next will undoubtedly depend largely on Bitcoin and whether or not it can continue consolidating above $30,000.
ETH did drop as low as $890 overnight, but the buying pressure here proved immense and helped spark its rebound.
Analyst: ETH Funding Rates Potentially Grim Sign for Current Outlook
One trader explained that he is cautious with Ethereum’s present outlook, noting that the strong overnight rejection and high funding rates could indicate that this move will be sold into.
“ETH: Rejected from weekly supply EQ for now. Predicted funding going ham, seems like apes are mashing the leverage long green button. I’m out of leveraged longs for now.”
Image Courtesy of Mayne. Source: BTCUSD on TradingView.
Bitcoin’s price action will undoubtedly hold some influence over that of Ethereum. Any influx of selling pressure seen by BTC will likely create tailwinds for ETH.
Featured image from Unsplash. Charts from TradingView.
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