Key Takeaways:
- Ethereum price trades sideways in a range bound manner on Wednesday.
- The On-chain data indicates volatility ahead in the short-term.
- To reverse the downside, the price must break the key resistance around $4,400-$4,450.
The Ethereum (ETH) price has moved with a negative bias since the beginning of the week. The second-largest cryptocurrency dropped 1.53% in the past 24 hours.
Following the drop, the price tested its 4-hour support near $4,300 with the Relative Strength Index (RSI) level of 42.6, indicating current neutral sentiment in the short term.
Since the high of $4,955.90 made in August, ETH’s price has been down roughly 12%, consolidating between $4,300 and $4,800. At the press time, the ETH/USD pair is exchanging hands at $4,373, up 0.58% for the day.
Ethereum Price Analysis- Four-Hour Chart Suggests a Bullish Breakout
Technically speaking, on the four-hour chart, the Ethereum price faces resistance near the trend line marked in purple. If the bullish momentum remains and the price manages to stay above its 4-hour immediate support, there is a probability for the asset to test levels near $4,800.
Ethereum Market Sentiment: On-Chain Data
Throughout August, the Ethereum (ETH) price hovered around the $4,200–$4,600 range, while the Taker Buy/Sell Ratio showed sharp volatility for the one-month time period.
The ratio is volatile throughout the followed time period, swinging frequently from bullish to bearish zones and indicating that traders are uncertain. Even with the price of ETH demonstrating very little volatility, the sentiment showed fragility through both bullish and bearish movements, which were mild and short-lived.
The current ratio for the metric stands below 1 and trends at 0.91, indicating that the price may face some resistance in the short term.
In early August, Ethereum’s Taker Buy/Sell Ratio jumped to 1.05, its highest level in weeks. This signals a trend toward bullish conviction, with buyers absorbing the selling pressure in perpetual swap trades that is additionally supported by the immediate support levels near $4,300.
What this Suggests for Ethereum Price in the Short-term
The current Ethereum outlook presents two scenarios:
Bullish Scenario: If the buy-sell ratio climbs back above 1 and sustains for several weeks, it can also be another bullish factor. New highs are likely as it could try to recapture and trade the next major resistance of around $4,800.
Bearish Scenario: On the contrary, if the ratio continues to stay below 1, then selling walls could push Ethereum (ETH) price lower to its key daily support levels around $4,050-$3,850.
What Is the Ethereum Taker Buy/Sell Ratio?
The Ethereum Taker Buy/Sell Ratio is an on-chain metric that measures the balance between aggressive buyers and sellers in perpetual swap markets. The ratio also incorporates two conditions as follows:
A ratio greater than 1 indicates aggressive buying is dominating and presents bullish sentiments in the market for the asset.
A ratio less than 1 implies aggressive selling is dominating and that price may be facing bearish pressure in accordance with bearish market sentiment.
