Analyst anticipates deeper declines for Ethereum if futures market conditions do not improve, warns of prolonged downward trend
As the entire crypto market experiences a downturn, Ethereum (ETH) faces the possibility of further decline, according to analysis conducted by ShayanBTC, a CryptoQuant analyst. The recent market turbulence has driven various altcoins to their lowest levels in weeks, with Ethereum dropping to its lowest point in over three weeks at $3,503. Despite a mild recovery to $3,537, investor anxiety remains high.
ShayanBTC drew attention to the Taker Buy Sell Ratio, which measures the aggressiveness of buyers versus sellers in the futures market. The ratio has been consistently falling and failing to climb above one, indicating aggressive selling of Ethereum futures. This bearish signal suggests that if this selling pressure persists, the downward trend in Ethereum’s price could continue.
Coinglass data reveals that while derivatives volume has spiked to a record $24.8 billion, Ethereum’s long/short ratio has dropped significantly to 0.8921, indicating a prevalence of short positions. This further reinforces the bearish sentiment surrounding Ethereum.
Despite the current market conditions, Ethereum is still trading above the 200-day EMA ($2,945) and the 50-day EMA ($3,381). However, analysts remain cautious about the potential for further declines if the situation in the futures market does not improve.
In conclusion, if futures market trends fail to improve, Ethereum may face steeper dips, prolonging the downward trend seen in recent weeks. Traders and investors should closely monitor the market conditions and consider the potential for increased volatility in the coming days.