Bitcoin is propelled by a growing interest from both the retail as well as the institutional front. ETHUSD is the second-largest cryptocurrency after Bitcoin by market capitalization.
ETHUSD follows Bitcoin’s moves more faithfully than any other crypto. Since Bitcoin’s rise earlier in the day, ETHUSD also pushed past near term resistance levels.
Technicals point at a bull trap for ETHUSD
The day’s range for Ethereum is $195.75 — $206.32.At the time of publication of this article, ETHUSD is trading at $202.20.
Although it might appear to be bullish, technical indicators hint of this being a bull trap.
Source: TradingView.com
We can see the substantial red spike in volume if we look at the daily timeframe for ETHUSD. It indicates a significant sell-off. Ethereum prices continued to rise even after this occurrence.
However, the traded volumes following the sell-off were not even close to the amount during the sell-off. But ETHUSD continued to rise, thereby confirming a bull trap.
The 20-day Exponential Moving Average would act as a support in the near term.
Investors need to be cautious while entering a position in ETHUSD
Although Ethereum might seem to be a lucrative investment opportunity, it is a hazardous proposition currently. Moreover, one needs to be careful of the whales.
Whales indulge in market manipulations and, therefore, might drive ETHUSD higher. Retail investors would jump into this bait in anticipation of quick profits. Once ETHUSD reaches a suitable price point, the whales will start dumping these to unsuspecting retail investors.
Therefore, investors must wait for till Ethereum rises organically fueled by a spike in demand and not just increasing BTCUSD prices.
