Ethereum The drop in volume and trading volatility of the coin on Wednesday caused the price to fall to the downside. ETH was stuck below the important $1,800 support, where it has remained for the past few days. It remains down about 16% from this month’s high.
volume and volatility retreat
ethereum, Bitcoinand others cryptocurrency The last few days have remained in a consolidation phase. One possible reason for this is that there have been no major catalysts in the industry this month. The second reason is that investors started booking profits after the spectacular rally earlier this year.
Ethereum price is likely to decrease as many investors have started withdrawing some of their ETH tokens from Lido, the biggest player in the liquid staking industry. Lido activated its V2 software on Tuesday, making it possible for people to make these withdrawals. Earlier it was impossible to get the coins back.
The data also shows that the overall Ethereum trading volume has declined over the past few days. Data compiled by CoinGecko shows that the volume in the last 24 hours was around $6.5 billion, which is below average. Historically, when cryptocurrencies are not performing well, they tend to attract lower volumes.
Another data shows that the open interest is dropped to 3.48 million ETH. Future Open Interest has been moving in a tight range over the past few days as shown below.
Ethereum volatility slips
Another thing to note is that the volatility of Ethereum has dropped sharply over the past few days. Using moving averages on the daily chart, we see that the coin is trending on the 25-day and 50-day exponential moving averages (EMA). This is an indication that there has not been any major movement in the price.
At the same time, the width of the Bollinger Bands has narrowed. Most importantly, the Average True Range (ATR) has come down to its lowest level since March 10. ATR is one of the most important volatility indicators in the market.
The implication of all this is that it is extremely risky to either invest in or short Ethereum right now as the direction of this breakout is unclear. Bullish trades should be placed only if ETH price rises above the year-to-date high of $2,134 in a high volume environment. If this happens, the next level to watch would be $2,500.
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