Ether (ETH) price has declined 6.35% from its Monday high of $4,109 this week after the altcoin formed a bearish engulfing pattern on the daily chart.
This is ETH’s third rejection at $4,000 in 2024, a level proving to be a strong weekly resistance during the past two attempts earlier this year.
Ethereum 1-week chart. Source: Cointelegraph/TradingView
As illustrated in the chart, the $4,0000 weekly resistance has been tested five times since 2021 and thrice in 2024, but a bullish breakout above the level has eluded Ethereum.
Ethereum futures traders turning bearish
Data from CoinGlass indicated that Ethereum’s future open interest reached a new all-time high of $28.70 billion on Dec. 17. While most futures traders have targeted long positions throughout November, the current sentiment might be turning momentarily bearish.
Ethereum agg. open interest, spot volumes, agg. premium. Source: Velo.data
Based on current futures market data, the aggregated premium of futures positions has turned bearish for the first time since Nov. 6. This highlights that over the past few days, more short positions have become active with respect to long positions, dragging prices back below the $4,000 mark.
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Data shows that the ETH long/short ratio dropped to 0.9 between Dec. 16 and 17, further strengthening the above argument that short traders outnumbered long traders.
Key price levels for ETH
Despite immediate bearish sentiments, Ether’s market structure has maintained an uptrend with higher highs (HHs) and higher lows (HLs).
From a technical perspective, ETH price could now retest the region between $3,715 and $3,628, where a fair value gap (FVG) combined with support from a 200-day EMA is located.
Ethereum 4-hour chart. Source: Cointelegraph/TradingView
This level is also significant because the cumulative long liquidation leverage positions between $3,700 and $3,800 collectively exceed $500 million, and prices can systematically reverse after a liquidity sweep.
Ethereum liquidation range. Source: CoinGlass
However, the cumulative short-leveraged positions are equally concentrated between $3,850 to $4,200. Therefore, ETH/USD may undergo another period of choppy price action. In light of that, Byzantine General, a futures market analyst, said,
“$ETH is hard to read at the moment IMO. I could see a lot of bullshit happen between $4000 & $3500, but eventually I don’t see how this resolves any other way than up.”
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
