- Ethereum price sees long holders stuck in a bull trap.
- ETH price faces headwinds coming from tailwinds that flaring up again at the US closing bell.
- Expect to see losses mounting up again with a possible retest of this year’s low.
Ethereum (ETH) price is revealing a not-that bright picture for bulls this week, both from a technical perspective and because of ballooning tail risks. As bulls could not manage a close above a crucial technical hurdle, price action slipped further to the downside and moved away from the essential historic barrier. More losses are on the table if existing tail risks are compounded by Russian retaliation. This in turn would trigger a massive sell-off in ETH price action.
Ethereum price is in a bad way both technically and from geopolitical headwinds weighing on price action. From a technical point of view, the bull trap on June 26 has ensnared plenty of bulls trying to get involved in the breakout that turned out to be false and rapidly led to a downside squeeze. The overnight communication from NATO that troop forces will be doubled in Eastern Europe, and the US committing to building a permanent base in Poland, has ramped up the stress and fears of a cold war and possible retaliation from Russia in a panic attack.
ETH price is thus set to drop from $1,243.89 back to $883.60 and possibly test a new low for the year. By doing so, $830.93 will come back into play and could be tested for support. That would mean another 30% of losses added to the already battered ETH price action.
ETH/USD daily chart
As commodities correct, all sectors have had their ‘bear market’ moment, and by now, investors could start buying the dip. That would mean more cash inflow while price action is still declining but at a much slower pace. This could lead to a slow but sure turnaround and swing back above $1,243.89. As persistent buying continues, the price may ramp up further and could set sail for $1,400 as an intermediary target.