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HomeCryptoWarning signs for ETH price? Traders, please pay attention to this...

Warning signs for ETH price? Traders, please pay attention to this indicator!

On May 20, Ethereum [ETH] has spiked above key resistance at $3,100 after three weeks of trying. The move comes on the heels of news of the approval of a spot Ethereum ETF, with official approval taking place on May 23.

However, since the bull run, trading volumes have dropped to levels seen in early May. The NFT market has also seen a significant drop in activity. Additionally, interest from US-based investors also dropped sharply.

Coinbase Premium hits 2024 low

The Ethereum Coinbase Premium Index is the percentage difference between the Coinbase ETH/USD pair and the Binance ETH/USDT pair. This is a good indicator of US investor interest as they can only access Coinbase and not Binance.

Source: CryptoQuant

Back in August 2023, the spread had plummeted to -0.16. Just ten days later, Ethereum price dropped from $1,800 to $1,600. While the Premium Index doesn’t herald every price drop, a drop in the index is a notable clue that demand on the other side of the Atlantic may be softening.

On May 29, the index dropped to -0.141, a sign of falling demand even as Ethereum traded above $3,700.

Other clues suggest that ETH price could soon bounce back

Liquidation level data from Hyblock shows that the Cumulative liq level delta (CLLD) index is negative. Now, despite the improvement over the past two days, short positions still outperform long positions.

Source: Hyblock

Therefore, to trigger the liquidation of many of these bears, the price may move higher. For example, the price action on May 31 saw a similar scenario play out. Buying liquidation levels are concentrated at $3,700, just 2.4% below the market price at the time of writing, which could be swept before a recovery.

ETH/USDT Daily Chart | Source: TradingView

The cyan box from $3,540 to $3,640 highlights the demand zone from March. The market structure is bullish and this demand zone is important in the short term. OBV failed to surpass the lower peak from April, which points to unstable demand during the recent rally. This indicator also strengthens the possibility of the price sweeping the $3,700 level and falling to the $3,600 area.

You can see ETH price here.

Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

SN_Nour

According to Ambcrypto

Mark Tyson
Mark Tyson
Freelance News Writer. Always interested in the way in which technology can change people's lives, and that is why I also advise individuals and companies when it comes to adopting all the advances in Apple devices and services.
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