ETH Charts Present A Darker Outlook With Another 25% Correction on Radar

After rallying all the way to $1,800 ahead of the Merge event last week, ETH has been on a downward journey and constantly under selling pressure. Over the last weekend, the ETH price crashed all the way to $1,300 losing some of its crucial support levels.

The technical chart for Ether (ETH) hints at a further downside for the Bitcoin challenger. This could mean that ETH could correct another 25% from the current price of $1,350, all the way to $1,000. Also, ETH and the broader crypto market have come under further selling pressure ahead of the FOMC meeting on Wednesday, September 21.

As of the recent correction, the ETH price has dropped under its standard deviation of the regression channel drawn from June lows. This opens up the possibility of a retreat to the third deviation of $1,250 and further to the next support level of $1,000.

On the upside, the ETH price has failed to break the ceiling of $1,800. On the downside, ETH made a move under its crucial support of $1,340. As per technical analysis, this breach of support brings the risk of further downside.

Ethereum Derivatives Market

As per the options data from Deribit, there’s a high number of ETH put and call contracts. The ETH open interest currently sits at the strike of $1,000 and $2,000 for September-end expiry. This defines the trading range for Ether. As Bloomberg explains:

This is part of a controversial theory that says options writers — often financial professionals — make more money than options buyers. The argument is that an asset’s price will move toward the level where options writers make the most profit — that is, where the greatest number of options expire as worthless for buyers. Deribit data puts this maximum pain point around $1,600.

The Ethereum Merge has also drawn the attention of regulators. Ina controversial filing, the U.S. SEC noted that it holds jurisdictions over ETH transactions taking place globally.

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.