Trading ETH: Short-term uncertainty vs. long-term optimism

TLDR

• ETH has faced resistance at the $1,823 to $1,853 area, leading to a rejection.
• The critical support level for ETH stands at $1,745, potentially dropping to $1,660.
• Funding rates, while positive, have come down significantly, and Open Interest remains relatively high.
• We affirm that ETH is attractive for long-term buyers at current prices, expecting potential short-term downside to test $1,745 support.

Disclaimer: Not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results. “One Glance” by Cryptonary sometimes uses the RR trading tool to help you quickly understand our analysis. They are not signals, and they are not financial advice.

Technical analysis

Yesterday, we said that “the $1,823 to $1,853 area remains the key resistance for ETH” - unfortunately, it remains the case today. ETH has rejected from this key resistance zone and is now back in its bull flag structure, which is now most likely invalidated. 

The key support for ETH is the $1,745 level. If this level is lost, then ETH could fall to $1,660. We feel that anywhere between $1,660 to $1,745 is an excellent long-term entry for ETH. 

For now, ETH remains in this range - support of $1,745 and resistance at $1,853. We feel that a drop to $1,745 could occur, but we expect this level to hold initially. 

ETH 1D

RSI and funding rates

The RSI on the daily has now reset substantially to 61, which is a relatively middle territory. 

Overall, when we look at the scale of some of the moves in the market, a few days of downside price action is actually healthy as it resets some of these trading indicators, which is what we’ve seen with ETH. 

Funding rates were very positive but have declined drastically despite still being positive. The open interest remains relatively high, however. 

Cryptonary’s take

As ETH continues to underperform, it remains at an attractive price point for the buyer if the buyer has a long-term viewpoint. In the immediate term, we expect ETH to go lower if BTC does – ETH could test the $1,745 horizontal support.

However, we wouldn’t be surprised to see BTC and ETH hold at these levels and make a further move to retest the $1,840 level. Currently, we are very 50/50 on this, but we prefer that long-term buyers wait to buy at lower prices. 

Action

• We’re not looking to trade this as the outlook is 50/50 now regarding direction in the short term. 
• In the long run, buying ETH at $1,745 and below is a great entry for the long-run. We still see ETH north of $8,000 at the top of the next bull market.