Ethereum (ETH) is trading below $1,600 on Friday following continued risk-off sentiment in the crypto market. The top altcoin has declined by 6.7% on the weekly time frame, extending its 30-day loss to 23.5%.
Despite continued negative sentiment across the market, bearish sentiment in Ethereum derivatives has eased over the past three weeks, with ETH’s sharp decline from above $2,000 to near $1,560 at the time of writing.
This move is evident in Ethereum net taker volume, which has gradually shrunk from negative territory during this period. The metric measures the difference in trading volume between buyers and sellers in perpetual futures using market orders.
The recent contraction indicates that pressure from short traders has eased after the majority of their positions became profitable following the decline.
ETH futures have also partially reset after the expected leverage ratio (ELR) fell from 1.11 to 0.85 over the past three weeks. ELR indicates the amount of leverage employed by a cryptocurrency by comparing its open interest to its exchange reserves.
The sharp decline in ETH’s ELR suggests that a large number of leveraged positions have been liquidated, potentially stabilizing the market and reducing leverage risk.
While leverage has declined along with the bearish contraction, ETH derivatives are marginally tilted to the downside as funding rates remain negative, especially after further price declines over the past few days.
Meanwhile, US spot ETH exchange-traded funds (ETFs) remain low on institutional appeal after six consecutive days of net withdrawals, according to data from SoSoValue. Products are on track for seven consecutive weeks of outflows and their biggest weekly decline since January.
A key price level watched by investors is the Realized Price Lower Band, which has served as a bottom indicator in the last two bear market cycles. metric suggests ETH could fall by almost 30% Before making the bottom.
Ethereum Price Forecast: ETH Falters Before Dropping to Trendline Resistance
On the weekly charts, ETH maintains a bearish bias as it remains below the key exponential moving average (EMA). The 7-week EMA around $1,817 and the 20-week EMA around $2,118 sit well above, reinforcing the downside, along with the longer-term 50-week EMA around $2,525.
The 14-week Relative Strength Index (RSI) is near 30 and the Stochastic Oscillator (Stoch) is below 10, suggesting that although sellers remain in control, the downtrend may be nearing an end.
ETH tested the $1,524 support level this week after seeing rejection at descending trendline resistance and convergence at the $1,741 level.
At the top, the initial resistance remains at the descending trend line, followed by the cluster barriers at $1,741, $1,806 and the 7-week EMA. Above these, further barriers lie at $1,909 and $2,019, before horizontal levels at $2,108 and $2,211.
On the downside, immediate support emerges at $1,524, which is ahead of the secondary bottom at $1,404. A deeper decline would expose a more important base near $1,156.
(The technical analysis for this story was written with the help of AI tools.)
