Ethereum price has rebounded 6.83% in the last 24 hours after hitting $2,770 on August 14, with market data showing how bearish headwinds from SHORT traders have offset the impact of a dovish US CPI.
ETH price fell by 6.8% in 24 hours
August started with uncertainty for Ethereum, but the price showed steady upward momentum last week, thanks in large part to Grayscale. The US investment firm sparked increased demand in the market after it announced the launch of new crypto trusts for SUI, TAO, and MKR.
The event, which took place on August 5, sparked optimism among investors, who saw it as a sign of deepening institutional adoption of the cryptocurrency. This bullish sentiment extended to ETH, pushing the price up 30% between August 5 and August 14, as shown in the chart.
However, the release of dovish US CPI data on August 14 changed the market dynamics. The initial optimism faded as investors turned their attention to stock markets, leading to a significant decline in cryptocurrency prices. ETH fell 6% in 24 hours, erasing most of its recent gains. The chart above shows how Ethereum stumbled as a result, and worries about a possible sharp correction in the coming days have grown.
The market reaction suggests that Ethereum may now face increased bearish pressure as derivatives markets hint at further downside risks.
Short traders wipe out dovish CPI
The initial optimism around the CPI data was short-lived as bearish sentiment began to dominate the Ethereum derivatives markets. A key indicator of this shift is the taker bid/ask ratio, which measures the ratio of buy orders to sell orders in the market.
The chart above shows how the Ethereum Taker bid/ask ratio has dropped significantly, from 1.07 on August 8th to 0.94 on August 14th.
This shift signals growing bearish sentiment among derivatives traders, who are increasingly betting against Ethereum. A decrease in the ratio usually indicates that sell orders are outpacing buy orders, which is a bearish signal for the market.
Despite the dovish CPI, traders remain skeptical about Ethereum’s short-term prospects, suggesting that the recent rally may not be sustainable. Given the prevailing bearish sentiment in derivatives markets, Ethereum could potentially fall to $2,500 in the coming days.
Ethereum Price Prediction: Bears May Trigger Reversal at $2,500
Ethereum price is currently struggling to hold onto its recent gains, with technical indicators pointing to a potential reversal. The Donchian Channel indicator, as seen on the chart, shows Ethereum price hovering around the lower boundary, pointing to strong resistance around $2,770. This level is now serving as a key resistance point, with the price struggling to break above it.
On the other hand, support is visible around $2,500, as the chart shows. If the bearish momentum continues, Ethereum could break below this support level, leading to a deeper correction. The Average Directional Index (ADR) further supports this bearish outlook as it points to a weakening trend. The combination of these factors suggests that Ethereum is at risk of a reversal at $2,500, with the bears tightening their grip on the market.
In conclusion, Ethereum’s recent rally appears to be losing steam as bearish sentiment in derivatives markets and technical indicators point to a potential correction. If the bears remain in control, ETH could see a sharp drop to $2,500 in the near term.
