As Ethereum (ETH) revisits the $3,500 support level in the midst of a market-wide downturn, analyst ShayanBTC from CryptoQuant warns of potential further declines if current trends in the futures market do not improve.
The recent volatility in the market has led many altcoins to hit their lowest levels in weeks. Notably, Ethereum recently fell to the lower end of the $3,500 range for the first time in over three weeks, testing the $3,503 support earlier today.
With the bearish sentiment prevailing, investors are feeling anxious. Data from the futures market suggests that traders are leaning towards a bearish outlook, anticipating more significant drops and prolonged turbulence.
In a recent report, ShayanBTC highlighted the Taker Buy Sell Ratio as a key indicator of market sentiment. This ratio measures the aggressiveness of buyers versus sellers in the futures market. A ratio above one indicates buyer dominance, while a ratio below one signifies seller aggression.
Recent market data shows that the seven-day moving average of this ratio has been trending downwards, failing to surpass one. This decline suggests that most futures traders are aggressively selling Ethereum.
This selling pressure could be driven by speculation or profit-taking in response to the current market conditions. ShayanBTC suggests that the sharp decrease in this ratio is a bearish signal, indicating that Ethereum’s price may continue to fall if this trend persists.
Despite a 131% spike 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 dominance of short positions, according to data from Coinglass.
Currently, Ethereum is trading at $3,537 after a slight recovery from the $3,503 support level earlier today. Despite a 3.58% drop, the crypto asset remains above the 200-day EMA ($2,945) and the 50-day EMA ($3,381).
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