Amid Bitcoin’s bearish price fluctuations, Ethereum, the king of altcoins, is fueling hopes for a potential bullish comeback in the coming days. Recent on-chain data indicates that Ethereum’s volatility is climbing, even as a bearish sentiment pervades the altcoin market. While this heightened volatility carries risks for Ethereum’s price stability, it also lures traders eager to profit from substantial price movements.
Ethereum’s Volatility Triples In Just Two Weeks
As Ethereum’s price faces challenges in breaking past the immediate resistance mark of $1,650, trading activity is intensifying, leading to increased price volatility. Additionally, Deribit data indicates that the “max pain” zone currently lies between $1,600 and $1,650, suggesting the possibility of significant price swings within this range.
According to data obtained from IntoTheBlock, Ethereum’s volatility has been on an upward trend over the last two weeks. The volatility has risen from the low of 10.63% on 16 August to 34.8% on September 5.
The recent surge in Ethereum’s volatility is generally seen as a bullish sign for its price. Increased volatility draws more traders and investors eager for quick gains, leading to higher trading volumes and upward price pressure. Traders who recognize the long-term value of Ethereum are more likely to buy and hold despite short-term price fluctuations, thereby contributing to upward price momentum.
Moreover, the estimated leverage ratio has bounced from its bottom level, hinting that traders are taking risks in ETH trading. ELR is currently trading around 0.22, suggesting that more investors are engaging in high-leverage risks within the derivatives market. As the ELR value is pumped compared to recent days, it signals that traders are increasingly confident in their positions.
What’s Next For ETH Price?
Ethereum’s price fell below the crucial support level recently, and the price is now attempting to break below the monthly support of $1,600. However, the extended lower wick on the chart indicates that buyers are stepping in at these lower prices to defend a steep decline.
While the bulls are making efforts to stabilize the situation, they’re finding it difficult to initiate a recovery, signaling a reduced interest for the asset to trade at higher price points. The downward trend in moving averages and RSI below the midline suggest that bearish momentum still dominates.
If the price drops below $1,600, the ETH price could potentially plummet to its intraday low of $1,576. This level serves as a pivotal point in the short term; a breach below it could pave the way for a further decline to $1,495.
A positive signal would be the price holding its current rebound above $1,600 and surging past the 50-day exponential moving average. If this occurs, the price could aim for the next resistance level at $1,743.