Ethereum Price News: ETH Consolidates After Hitting $2,800 – Key Levels to Watch

Not much has happened lately in the crypto space after Bitcoin (BTC) made a new all-time high.

As a result, the market has entered a stage of consolidation as crypto traders wait for the next catalyst that provides the necessary fuel for the next leg up (or down?).

The White House’s ongoing rift with China on the trade front may have spooked off traders and contributed to cooling down the FOMO prompted by BTC’s new record price.

Open interest in ETH futures reached a new record today at $37.6 billion just a few days after the price stretched to a higher high of $2,789.

Record-level OI indicates strong bullish momentum but also increases the risk of a strong pullback as the market seems to be getting too ‘one-sided’.

Bearish Divergence Pops Up in ETH’s Daily Chart

The Pectra upgrade is perhaps the most relevant catalyst behind this spike in trading interest in ETH, as this technical improvement makes the network more scalable and efficient.

Interestingly, the 24-hour long/short ratio for ETHUSDT futures on Binance has dropped to its lowest level in 30 days. However, this metric still emphasizes how heavily traders are betting on a bullish scenario, as it still stands at 1.31. On May 18, this ratio reached a level of 2.77.

Paired with record-level OI, it appears that traders no longer think that the price of ETH can go down. The risk of a strong pullback at this point is just too high to ignore it.

Trading volumes today have increased by 5% and currently account for 5% of ETH’s circulating supply.

The daily chart shows that ETH’s exponential moving averages (EMAs) have crossed above their most relevant long-term peer – the 200-day EMA.

This crossover is known as a ‘golden cross’ and, as we have noted in previous articles, the price typically reacts positively after this technical event as most traders interpret this as a buy signal.

Golden crosses imply that the short-term trend of an asset’s price is accelerating faster than its short-term one. This favors a bullish outlook as it indicates that positive momentum is growing.

For ETH, this golden cross comes at a point when the Relative Strength Index (RSI) is already quite stretched and just got out of overbought levels. Hence, this bullish crossover could be a false positive.

One possible tell for this is a bearish divergence in the RSI. This means that the price reached a higher high but momentum is on a downtrend. Hence, the uptrend’s strength is weakening and a correction could happen soon.

This does not mean that ETH will not make a higher high, but it does increase the risk of a strong pullback. Combined with the extreme readings seen in other indicators like record-level OIs and abnormal long/short ratios, this is a perfect recipe for a big ol’ long squeeze.

Key Levels to Watch for the Week

Looking at the hourly chart, we can see two key areas of support to watch along with ETH’s latest resistance at $2,750 – $2,800.

The first is the $2,550 level. This has been a relevant threshold for market participants multiple times, both as support and resistance, so it is worth watching.

Next up, is the $2,475 area from which Ethereum has bounced off nearly five times already. There seem to be some large order blocks sitting at that level, so traders should keep an eye on that support as well.