Ethereum (ETH) has seen a modest 1% price rise over the past 24 hours, reflecting the overall uptrend in the cryptocurrency market. However, this rebound follows a week-long downturn, primarily due to political tensions in the Middle East. While the brief rally may provide some relief to ETH holders, BeInCrypto’s analysis suggests it could be short-lived.
The negative readings from Ethereum’s daily active address (DAA) divergence indicate weak demand for the altcoin among market participants. Currently, this metric stands at -70.34%, showcasing a decline despite a recent price rally.
Historically, when an asset's price rises while active addresses decrease, it's seen as a sell signal. This implies that the recent rally is driven more by speculation rather than genuine demand, pointing to a potential short-lived price surge.
Furthermore, Ethereum's Parabolic Stop and Reverse (SAR) indicator, which helps identify trend direction, reinforces a bearish outlook. The indicator's dots are currently positioned above ETH's price, signaling downward pressure and suggesting a continuation of the bearish trend.
The Parabolic SAR dots above the price may act as dynamic resistance, with selling pressure likely to increase near the $2,620 mark. If this selling pressure intensifies, Ethereum's price could decline by 14% to reach its August 5 low of $2,116.
However, if demand resurfaces, ETH may break above the resistance at $2,700 and target $3,338.
In summary, while Ethereum has recently shown some price strength, the underlying metrics suggest that challenges remain. Investors should remain vigilant of market trends and demand signals.
