Ethereum’s Bounce Still Lacks Conviction — Downside Risk Remains

Overview

Ethereum is currently attempting to recover from a recent selloff, but the strength of this rebound has not yet confirmed a sustainable bottom. The recent market movements indicate that the recovery lacks the necessary momentum to assure buyers of a decisive shift in market dynamics.

Current Market Situation

Ethereum has been facing selling pressure, which has raised concerns about its ability to maintain upward momentum. According to a recent update by More Crypto Online, the current bounce in price appears corrective rather than impulsive. This means that the recovery lacks the strength needed to confirm a lasting reversal in trends. Key resistance levels remain unbroken, which suggests that the risk of further downside remains unless buyers can create a significant structural shift in the market.

The analysis highlights that a clear impulsive five-wave advance or a decisive break above the recent weekend high is necessary for a bullish confirmation. Without these indicators, the downside scenario continues to hold validity. The current market structure does not provide clear technical evidence of a durable reversal, and the momentum observed thus far has been limited.

After a notable selloff on Sunday, Ethereum is showing early signs of stabilization. Lennaert Snyder’s analysis notes that Ethereum reached relatively weak extremes over the weekend, with lows around $1,929 and highs near $2,107. These levels now serve as key liquidity reference points for traders in the upcoming week.

Snyder’s broader strategy anticipates a potential push towards higher prices. However, he emphasizes the importance of mitigating nearby liquidity pools before considering long positions. The higher-timeframe trend remains downward, which validates short setups if the right market structure emerges. For long entries, Snyder suggests that a sweep of the $1,946 and/or $1,929 lows could provide the necessary liquidity grab for a high-probability reversal back toward the weekend high.

Conversely, should the price rally directly from current levels without touching these lows, Snyder would look for short opportunities following a market structure break near the $2,107 high. Additionally, there is liquidity around $2,015 that may offer potential scalp setups depending on whether the price gains acceptance above it or experiences a sharp rejection.

From author

The current situation surrounding Ethereum highlights the ongoing volatility and uncertainty in the market. Traders are closely monitoring key price levels to identify potential entry points, but the lack of a decisive upward movement raises concerns about the sustainability of any recovery. The emphasis on liquidity pools and market structure indicates a cautious approach among traders, reflecting the overall sentiment in the cryptocurrency market.

Impact on the crypto market

• Ethereum’s struggle to confirm a lasting bottom could influence broader market sentiment, impacting other cryptocurrencies.
• The current focus on liquidity pools may lead to increased volatility as traders react to price movements around key levels.
• A failure to establish a sustainable recovery could lead to further selling pressure, affecting investor confidence.
• The cautious approach taken by traders, as noted in Snyder’s analysis, may result in lower trading volumes and diminished market activity.
• The overall downward trend in higher timeframes suggests that traders may remain skeptical about long positions until a clearer reversal signal is provided.