Should Ethereum traders be cautious after the bounce above $1700

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

• The market structure and trend remained bearish.
• Ethereum could drop toward $1500 if the bulls fail to hold on to $1700 over the next week.

Ethereum had a bearish market structure on the daily timeframe. Investors were pulling Bitcoin and Ethereum off of centralized exchanges and putting them in DEXs or self-custody and buying pressure was depressed, although the platform’s gaming sector saw a boost.

Read Ethereum’s [ETH] Price Prediction 2023-24

Hence ETH bulls can wait for an opportunity, while sellers can look for a strong bounce before shorting the asset. Traders will likely find opportunities, but the daily timeframe bias remained bearish according to the price chart of the king of altcoins.

Ethereum was forming a bearish divergence on the chart as buyer conviction looked weak

Source: ETH/USDT on TradingView

Ethereum continued to trend downward on the daily timeframe. The recent lower high of this downtrend was at $1778 with an aggressive reading of the market, or at $1898 with a more conservative view. Therefore, these are the levels that ETH bulls must breach to show that bulls had some control in the market.

Such a scenario appeared unlikely at the time of writing. The OBV was just above the May lows but trended downward over the past three weeks. The RSI was below neutral 50 to show bearish momentum. The RSI could form a bearish divergence with the price, highlighted in cyan, if ETH does not push past $1778 within the next week.

The $1750-$1790 area served as support from early April but was flipped to resistance just a few days ago. A retest of this region could see rejection, although short sellers must beware of a liquidity grab in the $1800 zone.

The mean coin age has descended alongside the price, sentiment also suffers

Source: Santiment

The 90-day mean coin age was in an uptrend from late April to early June. On 4 June it reached a 3-month high but began to wane thereafter. The past ten days showed intense selling pressure across the market, but the metric picked up in the past 12 hours.

How much are 1, 10, or 100 ETH worth today?

Meanwhile the MVRV showed holders were at a loss and the weighted sentiment was firmly in negative territory. They reflected the sentiment of investors, and the argument that ETH is undervalued at press time holds water. Yet buyers must be cautious as the trend was against them and can wait for more favorable winds.