Ethereum price wobbles 0.8% while exchanging hands at $1,915 on Monday. The second-largest crypto battled an aggressive take-profit drive over the weekend, with ETH sliding from almost a three-month high achieved last week at $2,015.
Traders cannot ignore the overhanging danger of a pullback below Ethereum price’s immediate support at $1,900, especially with Bitcoin price delicately holding onto a high cliff’s edge, reinforced by the buyer congestion at $30,000.
A Minor Pullback But Open Interest is Climbing
Based on live data from Coinglass, a platform for tracking the crypto derivatives market, the Ethereum open interest is up by 0.98% to $6.26. Traders saw $10.48 million of 24-hour liquidations, with $8.19 million in longs and $2.28 million in shorts.
Notably, rising open interest indicates that new money is entering the Ethereum market and that there is more interest and activity in the derivative contracts. It also implies that there is more liquidity and diversity in the market, as more traders are willing to take different positions and opinions.
Therefore, if Ethereum upholds the short-term support at $1,900 and the open interest maintains a positive outlook, bullish momentum would build up, thus creating a suitable environment for a breakout.
However, caution is often advised if the price of the underlying asset, ETH in this case, is falling and the open interest is also rising. This suggests that there is a strong bearish trend and that more traders are opening short positions or closing long positions.
It is a negative sign for Ethereum and may indicate further price depreciation.
Can Ethereum Take on $2,000 Resistance to Rally?
Ethereum price is fighting for support at $1,900, following a rejection it faced when it encountered the upper boundary of a descending channel. Further declines below $1,900 are highly likely considering the open interest is climbing while the price struggles.
If support at $1,900 weakens paving the way for heightened selling pressure, bulls would extend their gaze to the support provided by the 50-day Exponential Moving Average (EMA) (in red) at $1,869.
Traders seeking exposure to short positions would target the subsequent support area as highlighted by the 100-day EMA (in blue) at $1,832, but this buyer congestion extends to $1,800.
The Money Flow Index (IMF) adds credence to the bullish outlook as the money inflow and outflow indicator close in on the oversold region.
Most traders may choose to wait patiently until Ethereum price confirms a trend reversal from the above-mentioned support levels.
A daily close above $1,900 coupled with the subsequent northbound movement eyeing $2,000 may trigger FOMO, calling investors to enter the market and bet on a larger uptick to $2,200, which might eventually transition to $3,000 as the momentum builds the rally.
Two of the most essential breakout determinants are resistance at $2,000 and support at $1,900. Losing this support could be detrimental to Ethereum’s uptrend but breaking the $2,000 hurdle could be the much-awaited rally ticket to $3,000.
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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
