ETH – Fake Pump & Dump ?

As we move towards the top of the Bitcoin range, this week is answer week for the Ethereum ETF. However, the price configuration leaves something to be desired, and we’ll take a look at that together.

Warning This article does not constitute investment advice or an invitation to invest. It is for information purposes only. You are solely responsible for your trading and investment decisions.

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We had the right words

Once again, range traders are in for a treat with a classic we covered 2 weeks ago in this article. A false exit from a range and the price moving back inside usually leads to the other side of the range.

This is a classic one to remember if you’re new to trading, combining this with orderflow and the bearish sentiment there was, we’d been able to determine that the price was definitely going to go back up. Not missed. Well, we’ve brushed our backs enough, our egos are better, let’s get on with the analysis.

Resistance on Bitcoin again

Once again, we’ve reached the monthly resistance level on Bitcoin, the one that protects the ATH (All Time High) before a potential new price discovery (Price discovery). However, this surge is largely due to ETH (Ethereum), which surged by almost 20% yesterday.

This surge is due to the new rumor that the ETH ETF might finally be accepted on Friday, against all odds, as many of us thought it would be rejected. Strangely enough, this rumour comes just before the release of the announcement, when nobody knows anything about it apart from the SEC, which decides on ETF acceptance. What’s really disturbing here is the structure of the price.

In fact, Ethereum is both in the long-term selling zone of the previous rally (the big red zone) and in the selling zone of the previous movement, giving a double red zone. In other words, we’ve sent the price back exactly where the biggest sellers will be able to position themselves.

At the same time, we’re at the limit of the ATH on Bitcoin, which would allow us to liquidate all sellers in a single wick, before heading back south with as few winners as possible.

In parallel number 2, orderflow is showing some excitement on altcoins… Which rarely rhymes with bullish continuation.

Orderflow BTC/USDT

The Bitcoin orderflow above, showing the Bitcoin price and spreads (= market sentiment), shows us that players are strongly bullish again, and therefore buying on the rise and the arrival of resistance. We would have preferred the rise to have been in denial, so that sentiment would have been bearish as the ATH approached.

The orderflow of altcoins (excluding Ethereum) shows us that FOMO (Fear of Missing Out, the fear of missing out on something, especially a gain) is back… Indeed, the number of open positions has exploded by 50%, from 10 to 15 billion in leveraged altcoins. This is accompanied by strong growth in funding (the green curve below), showing that the balance is tipped in favour of the buyers. Nothing good here.

Conclusion

Not a great combination. Indeed, seeing a return to Bitcoin resistance accompanied by a potential revival of the Ethereum ETF based on rumors of altcoins being bought as leverage sounds very bearish all the same!

The only way for the price to really go north is for sentiment to change OR for the ETH ETF to actually be accepted! In which case, the money arriving on ETH will be such (cf. that which arrived on Bitcoin in January) that the price of the latter is likely to climb sharply, dragging a whole ecosystem of altcoins with it! See you on Friday for the final decision!

In the meantime, I wish you a good week, it was CryptNaAb for the pleasure of sharing!