As the price of Ethereum (ETH) revisits the $3,500 mark during the recent market-wide decline, CryptoQuant analyst ShayanBTC warns of potential further drops if the current futures market trends do not improve.
The recent market volatility has pushed several altcoins to multi-week lows. Notably, Ethereum recently dipped to the lower end of the $3,500 range for the first time in over three weeks, testing the $3,503 low earlier today.
With bearish conditions prevailing, investor confidence has taken a hit. Data from the futures market indicates a bearish sentiment, with traders anticipating more significant declines and continued turbulence.
ShayanBTC highlighted the Taker Buy Sell Ratio in a recent analysis, a metric that measures the aggressiveness of buyers versus sellers in the futures market. A ratio above one signifies buyer dominance, while a ratio below one indicates seller aggression.
Recent market data shows a decline in the seven-day moving average of this ratio, failing to surpass one. This downward trend suggests that most futures traders are aggressively selling Ethereum.
This behavior could be driven by speculation or profit-taking amid the current market environment. ShayanBTC warns that the significant drop in this ratio is a bearish signal, indicating that Ethereum’s downward price trend may persist if selling pressure continues.
Despite a 131% surge in derivatives volume to a record $24.8 billion, Ethereum’s long/short ratio has plummeted. This ratio now stands at 0.8921, indicating a prevalence of short positions, according to Coinglass data.
At present, Ethereum is trading at $3,537 after a slight recovery from the $3,503 low earlier today. Despite a 3.58% decline, the cryptocurrency remains above the 200-day EMA ($2,945) and the 50-day EMA ($3,381).
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