Ethereum Rollercoaster: Will It Plunge to $1,500 or Just Seem Like It?

by

Ah, Ethereum! The cryptocurrency that has recently decided it would rather take a nosedive than participate in the adult activity of market stability. Yes, it has entered an aggressive deleveraging phase, which sounds suspiciously like a gym regimen gone horribly wrong. Picture Ethereum doing squats while geopolitics throws weights around like a toddler having a tantrum.

As our dear friend crypto flounders about, this latest escapade seems to be driven by escalating tensions in the Middle East. This has sent risk assets fleeing faster than cats from water, leaving behind a trail of confused investors wondering if they accidentally clicked “Buy” on their most recent impulse purchase.

Ethereum Price Analysis: The Daily Chart

Now, if we gaze into the crystal ball-or rather, the daily chart-we see ETH breaking down from what was once a lovely ascending structure. It’s as if ETH took a wrong turn on its way to the moon and ended up in the land of lost opportunities where the 100-day and 200-day moving averages float serenely above the $3,000 mark, mocking anyone who dares to dream.

But wait, there’s more! The price has plunged below the initial demand band-a range so significant it could have its own fan club-hovering around $2,200-$2,000. The daily RSI is now wallowing in the low 20s, which is akin to getting stuck in a very uncomfortable chair at a family reunion, indicating that things are not looking rosy for short-term conditions.

As long as Ethereum remains trapped below those pesky moving averages and that oh-so-elusive $2,200 support, we are firmly on the bear-market express. Next stop: Despair Station.

ETH/USDT 4-Hour Chart

On the 4-hour chart, we witness the sell-off’s speed-a veritable rollercoaster ride with ETH cascading lower from its previously defended $2,800-$2,900 support. It barely paused for breath as it plummeted through levels like a contestant on a game show answering incorrectly. Now it’s attempting to stabilize around the $1,850-$1,900 range, where a glimmer of hope appears in the form of mild bullish divergence. Yes, folks, momentum is starting to print higher lows, but don’t hold your breath yet!

This configuration could suggest that the forced selling pressure is finally easing up, much like a traffic jam after a mysterious road closure. A short-term relief bounce might just be on the horizon, provided we can avoid stopping below those resistance bands at $2,100-$2,200. If ETH dips below the recent $1,800 low, however, it seems a trip to the infamous $1,500 demand zone could be imminent. Buckle your seatbelts!

Sentiment Analysis

In the land of derivatives, open interest across Ethereum futures has taken a nosedive from towering heights above 30 billion USD to a mere fraction of that size. This dramatic decline is tracking the price drop and signifies that a large-scale liquidation cascade is in full swing, rather than a simple tidy-up. It’s like watching your favorite bakery close down because someone forgot to pay the rent.

The sharp contraction in open interest indicates that many leveraged longs have been evicted from the market, forced out by margin calls like overzealous bouncers at an exclusive nightclub. While such events are painful in the moment, they tend to cleanse the excess leverage from the system, allowing fresh capital to take the reins instead of crowded derivatives exposure. Now, if only we could apply that principle to reality TV shows!

 

Read More

2026-02-06 16:58