Ethereum struggles at key resistance, neutral RSI keeps traders on edge

• ETH’s moving averages remain critical resistance levels.
• ETH now hangs on neutral on its RSI.

Ethereum [ETH] experienced a spike in the past week, sparking optimism among investors and traders who believed it could signal the start of a much-needed positive trend.

However, this optimism quickly faded as Ethereum’s price tapered off, failing to maintain the upward momentum. As a result, market activities around Ethereum have become less exciting, with the initial enthusiasm giving way to caution.

Ethereum sees muffled price trends

Analysis of Ethereum’s daily chart indicates that the asset experienced a relatively uneventful trend until a significant spike on 23rd August. This spike saw ETH’s price increase by over 5%, rising from approximately $2,623 to around $2,764. 

Source: TradingView

However, the momentum quickly faded, with the following trading session delivering only a modest 0.1% increase. As of this writing, Ethereum is trading at around $2,754, reflecting a slight decline of about 0.5%.

The analysis suggests that the bullish trend, sparked by the initial spike, has stalled as Ethereum’s price failed to gather sufficient momentum to continue upward.

The Relative Strength Index (RSI) analysis shows it is currently hovering around its neutral line, indicating a lack of strong directional momentum in the market.

Additionally, the short-moving average (yellow line) remains a critical resistance level at around $2,900, which Ethereum has yet to breach. The long-moving average (blue line) is positioned as the next significant resistance level, around $3,200.

For Ethereum to establish a sustained bullish trend, it would need to overcome these resistance levels. Until then, the price may continue to struggle to break out of its current range, with the bullish momentum hanging in the balance.

Ethereum sees less liquidation

A recent analysis of Ethereum’s liquidation trend over the past few days indicates that there hasn’t been a significant liquidation trend for several weeks.

The only notable activity occurred on 23rd August when ETH’s price saw a 5% increase. That day, liquidations spiked to approximately $50 million, with short positions particularly affected. Data shows that short liquidations accounted for over $34 million.

The relatively low volume of liquidations in recent days suggests that traders are exercising greater caution in their positions, likely due to the current market uncertainty. 

Trend remains positive

One positive aspect of Ethereum is the ongoing favorable market sentiment, as evidenced by its consistently positive funding rate. The analysis shows that Ethereum’s funding rate has remained above zero, indicating that buyers are still dominant.

Read Ethereum (ETH) Price Prediction 2024-25

The positive funding rate suggests that long positions continue to prevail, with traders willing to pay a premium to maintain their long bets on Ethereum.

This dominance of long positions reflects confidence among market participants in Ethereum’s potential for future price appreciation despite the recent lack of momentum and the cautious behavior observed in liquidation trends.