Ethereum Price and Leverage Ratio Show Mixed Signals for Market Trend

By: Eva Baxter

Ethereum Price Eyes Steady Recovery

Ethereum is displaying positive indicators as it aims for a steady recovery. After trading consistently above the $3,000 level, ETH has shown signs of gaining bullish momentum. The price is currently stabilizing over the 100-hourly Simple Moving Average. If Ethereum can move clearly above the $3,110 resistance level, we might witness further gains. The first major resistance after $3,110 stands at $3,150, with significant hurdles located at $3,220 and $3,320, potentially pushing ETH up to the $3,500 zone.

However, if ETH fails to break through the $3,110 resistance, another decline could be on the horizon. A downside move might see Ethereum dropping to initial support levels around $3,020 and $2,975, which also aligns with the 61.8% Fib retracement level of the recent upward move. Dropping below these support zones could push ETH towards $2,920, with further declines potentially taking it to $2,820.

Technical indicators show a mixed scenario. The Hourly MACD for ETH/USD is losing momentum in the bullish zone and the RSI remains slightly above the 50 mark, indicating a neutral territory but with slight bullish tendencies. Overall, traders are keeping a close eye on the $3,110 resistance to gauge the next market move.

Leverage Ratio Peaks Amid Price Surge

The Estimated Leverage Ratio (ELR) for Ethereum has fluctuated significantly in recent months. Starting the year around 0.26, the ELR grew steadily and peaked at approximately 0.34 in February. These movements coincided with price increases, reflecting increased market confidence and speculative activity. As Ethereum's price declined in April, the leverage ratio also saw a reduction, indicative of decreased leveraging in the market.

Another upward trend was observed in late May, where the ELR spiked to an all-time high of 0.48 in early June. This peak occurred alongside price recovery, suggesting high speculative confidence during this period. However, since June 2024, both the leverage ratio and Ethereum's price have observed a downward trend, with the ratio retracing back to around 0.42 as Ethereum's price corrected to approximately $3,000.

This overall decline might reflect broader market caution and a deleveraging pattern influenced by macroeconomic factors and regulatory considerations. Such trends are crucial for traders and investors to monitor, as they provide insights into market sentiment and potential future price movements.