Ethereum's Potential Peak Reversal?: Sellers Gain Upper Hand over Buyers by $570 Million
In recent weeks, the Ethereum (ETH) to Bitcoin (BTC) ratio has been trending lower, indicating a notable shift in the crypto market. This trend has raised concerns among analysts, who believe that maintaining the current market structure for Ethereum is crucial.
Two key support levels have been identified for Ethereum's price: $3,960 and $3,360. According to analyst Ali Martinez, these levels are vital for preventing further declines in the Ethereum price. However, the trend of Bitcoin dominance rising while Ethereum weakens against Bitcoin is a concerning sign.
Derivatives data suggest that sellers are exerting greater pressure on Ethereum, pushing the price lower. This pressure is further evidenced by the net taker volume in Ethereum futures, which is skewed towards sellers by approximately $570 million.
The current consolidation phase for Ethereum could be broken out with Bitcoin's outperformance, as per the expectations of analysts like Crypto Trader Daan Crypto Trades. Traders expect Bitcoin to outperform in the near term as ETH/BTC weakens amid current capital rotation.
Institutional inflows in spot Ether ETFs have been observed, but this influx may not be enough to counteract the selling pressure on Ethereum. The potential for Bitcoin to outperform Ethereum in the near term is a possibility, as suggested by multiple analysts.
The market rotation from Ethereum to Bitcoin is ongoing, and analyst Benjamin Cowen expects this trend to extend through September and October. Historically, such levels of concentrated selling have often coincided with local market tops. As a result, there is a potential Ethereum price downside risk in the near term, with the Ethereum price dropping below $4,000 being a possibility.
It's important to note that most of Ethereum's larger upward moves during this period were driven by a single entity swapping billions in BTC to ETH. This concentration of buying power highlights the potential for significant market movements based on a single entity's decisions.
In conclusion, the Ethereum price is under selling pressure, and the potential for Bitcoin to outperform Ethereum in the near term is a possibility. Analysts recommend caution for investors in the Ethereum market, as the current market structure could be at risk due to the selling pressure.
