Ethereum Price Drifts Lower as Volume and Volatility Decrease
On Wednesday, Ethereum's price drifted downwards as its volume and trading volatility decreased. ETH remained stuck below the important support level of $1,800, where it has been in the past few days. It is around 16% below its peak this month.
Volume and volatility decreasing
Ethereum, Bitcoin, and other cryptocurrencies have been in a consolidation phase in the past few days. One probable reason for this is that there have been no major catalysts in the industry this month. Another reason is that investors began to take profits after the remarkable comeback earlier this year.
ETH price is likely declining as many investors started to withdraw some of their ETH tokens from Lido, the biggest player in the liquid staking industry. Lido activated its V2 software on Tuesday, allowing people to make these withdrawals. Previously, it was impossible to withdraw the coins.
The data also shows that the total volume of Ethereum traded amount has fallen in the past few days. Data compiled by CoinGecko shows that volume in the past 24 hours was about $6.5 billion, which is below average. Historically, cryptocurrencies tend to attract less volume when they are not doing well.
Other data shows that open interest has fallen to 3.48 million ETH. As shown below, the open interest for futures has remained in a narrow range in the past few days.
Ethereum volatility decreases
The other notable thing is that Ethereum's volatility has significantly decreased in the past few days. Based on the moving averages on the daily chart, we see that the coin is stuck at the 25-day and 50-day exponential moving averages (EMA). This is a sign that there have been no major price swings.
At the same time, the width of the Bollinger Bands has decreased. Most importantly, the Average True Range (ATR) has decreased to its lowest level since March 10. The ATR is one of the most important volatility indicators in the market.
All of this means that it is very risky to either invest or go short on Ethereum at the moment, as the direction of the breakout is unclear. Bullish trades should only be made if the ETH price rises over the previous year's high of $2,134 in a high-volume environment. If this happens, the next mark to watch is $2,500.
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Categories: Crypto, Ethereum, Price Analysis
Tags: ETH, Ethereum, Volatility, Volume
By: Samuel O'Brien
O'Brien is a financial journalist with a degree in journalism from the London School of Journalism. He's been published in the Financial Times, Bloomberg, and other reputable publications.
Disclaimer: The above should not be considered trading advice from CCN.com. The writer owns cryptocurrencies. The post Ethereum Price Drifts Lower as Volume and Volatility Decrease appeared first on Coin Journal.
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