Ethereum is sending mixed signals amid the overall market decline. While institutions are hedging their bets, bracing for volatility, retail investors are going long. Interestingly, technical indicators seem to show that both are right.
On Thursday, February 27, the Ethereum price continued to trend downward, along with the rest of the crypto market. With Bitcoin reaching its lowest point since November, most cryptos are in the red. Still, Ether has seen a relative uptrend from its recent low of $2,250 on Wednesday.
Luckily for holders, it held above the critical support at $2199. Namely, this is the level at which most large holders are at a breakeven point. A dip below that level could have triggered a major selloff. However, now that ETH is defending this support, upward momentum is possible.
In fact, traders are gearing up for a potential reversal, and the charts reflect a similar situation. For instance, ETH’s Relative Strength Index (RSI), an indicator of the speed of price changes, recently entered oversold territory. Historically, this was a sign of a significant upcoming rally.
Moreover, the Stochastic RSI, a relative measure of price changes, is near zero. This indicator gauges short-term price swings, indicating it is more sensitive to Ethereum’s current volatile conditions. It is also in oversold territory, suggesting the ETH price is set for a reversal.
Investors Brace for Major Volatility for Ethereum
These moves show signs of a Wyckoff Accumulation pattern, which often comes before a major price jump. The pattern often involves two checks of a critical support level, after which the token takes off. Ethereum had these two checks in September of last year and this week.
Under these conditions, both institutions and retail investors are gearing up for major volatility. According to Nansen, institutions are hedging their bets, using buying calls and puts simultaneously. This indicates a bet on high volatility, regardless of price direction.
At the same time, retail investors are going long. This means they face liquidation if bears win out in the ETH market. However, Nansen concurs that Ethereum’s current position appears bullish. Still, the analytics firm advises buying some put options to protect against volatility.
READ MORE: Is Ethereum Set for a Bullish Reversal? Charts Suggest So
