Ethereum, the cryptocurrency with the second largest market capitalization, is quietly about to enter a state of upsetness. The chart is beginning to show the inertia caused by wider price actions, despite assets still above the significant short-term moving average. ETH is currently trading at around $1,825, making it difficult to break through local resistance levels with confidence.
Ethereum’s volume profile is the most obvious cause of concern. Over the past few weeks, daily trading volumes have declined significantly, and are now approaching historic lows. From this volume collapse, market players are unsure of themselves and seem to be in charge of either bulls or bears. This classic signal shows a market that has lost momentum, waiting for a catalyst.
Volatility has also collapsed. There are no indications of excess or overselling conditions, and the relative strength index (RSI) is currently in a neutral area of less than 60. This coincides with the lateral price movements that ETH has shown since mid-April. ETH is difficult to maintain momentum for all kinds of long-term breakouts, as 50 EMAs hover just above the current price level.
Nevertheless, this quiet thing can be misleading. Just below the key psychological levels of $1,900 to $2,000, Ethereum is integrated. Such integration periods precede frequent, rapid directional movements. The lack of purchases seriously weakens bullish cases, but the current setup opens up the possibility of a sudden reversal.
Ethereum’s upside potential is limited unless it surges into macroeconomic catalysts and chain activity. In the meantime, a drop below 50 EMA (~$1,765) would likely cause a new round of sales, pushing ETH back to $1,600. The next important spike can determine the course of the legs afterwards, so investors need to closely monitor the amount.