Within the 0-5% depth range of the order book, Ethereum [ETH] exhibited a significant 10% imbalance in bids, hinting at a potential scarcity in supply and a strong interest in buying at the price level of approximately $3,886.76.
These price levels favored bids by 10%, indicating a higher inclination to buy rather than sell.
This disparity reflected a bullish sentiment, with more traders showing willingness to acquire ETH at or above this market price, potentially propelling prices upwards if this trend persists.
Furthermore, there were noticeable spikes in trading volume corresponding to noteworthy price fluctuations, both upwards and downwards.
The uptick in bid dominance alongside elevated trade volumes suggests ongoing bullish momentum for Ethereum. Past trends demonstrate that such imbalances often precede price surges.
Increased Inflow Volume into Exchanges
However, Ethereum witnessed a sharp surge in inflow volume into exchanges, spiking by 208.96% in the last 24 hours. This surge implies that investors might be transferring ETH to exchanges, possibly in preparation for profit-taking or potential sell-offs.
The weekly shift indicated a 17.57% decrease in inflow volume, showcasing a lesser amount of ETH being moved to exchanges compared to the previous week, potentially indicating a decrease in selling pressure.
Conversely, the monthly change surged by 61.49%, suggesting that in the recent month, there has been a higher tendency to relocate ETH to exchanges than in prior periods.
This influx could moderate the optimistic outlook portrayed by the order book ratio, which highlighted low supply and high demand.
Since inflows hint at potential selling pressure, they might trigger a temporary descent in ETH prices despite favorable demand indicators.
How Deep Could ETH Decline Before Finding Support?
Considering the current scenario, Ethereum might be gearing up for a minor setback before pivoting towards a resumption of the bullish trend, presently trading around $3,689 after descending from the higher resistance near $4,082.
Although trading volume surged during sell-offs, pointing towards a decline, the RSI dipping below the oversold territory, now below 30, indicates an extensively bearish movement that could prompt a reversal if buyers intervene.
The drop of ETH below the 20EMA and 50EMA hints at short-term bearish momentum, contrasting with the potential near-term support that the 200EMA might offer.
Ethereum displays signs of probing a critical support level at the 200EMA approximately at $3,500, potentially poised for a turnaround indicated by an oversold RSI.
If this level remains intact, an uptrend towards higher levels may be foreseen as funding rates reach multi-month peaks, showcasing increased trader confidence and an anticipation of higher valuations.
The spike in funding rates above 0.04%, aligning with price fluctuations, reflects a sharp escalation in trader leverage, often foreshadowing price volatility.
Elevated funding rates denote robust bullish market sentiment, although they might trigger short-term adjustments due to excessive leveraging.
The resurgence of high funding rates, reminiscent of those observed in early 2024, underscores significant market participation and enthusiasm. Nevertheless, this can pose a correction risk if the market becomes overheated.