- Ethereum order book dynamics indicate the peak of the rally.
- ETH may be experiencing a bear market, but it’s worth investigating.
As the largest altcoin, Ethereum [ETH] remains in the spotlight due to its capability for scalability and its extensive application within the blockchain ecosystem.
Nevertheless, Ethereum has been trailing on longer timeframes for more than five months, leading to speculation about whether the crypto market is still in a bullish cycle.
Analysis of the 1-day timeframe for ETH reveals that the Combined Books for spot order book depth reached their zenith in May.
This metric, which showcases the peak levels of passive limit orders (bids and asks), frequently indicates the conclusion of a rally, subsequently followed by a bearish trend.
Source: Hyblock Capital
Historical data supports the notion that ETH may have reached its peak during the bull market that culminated in May, suggesting the market is currently in a consolidation phase.
Since then, ETH has been largely stagnant, lacking a defined trajectory. But does this mean we are witnessing a bear market?
Is ETH in a bear market
Examining ETH’s price fluctuations raises the possibility of a bear market. The ETH/USDT pairing has been on a downward trend since early June, breaching its established range on the daily charts during the market crash on August 5.
Since that downturn, it has faced challenges in staging a recovery, indicating a potential bear market scenario. However, the price candles for ETH are currently green, signaling a possible retracement towards the $3000 mark following the sharp sell-off.
Source: TradingView
The price may be capped around the $3,000 threshold. Should ETH manage to break through and hold above $3,000, a potential rally could ensue. Conversely, if it fails and retreats below this level, it would likely confirm the bear market.
In support of this outlook, both the Chaikin Money Flow and the Relative Strength Index (RSI) are showing positive trends, suggesting bullish momentum until ETH approaches the $3,000 range.
Balance on all exchanges
A closer examination of the ETH balances on exchanges reveals additional concerns about a potential bear market.
Over 547,600 ETH, valued at more than $1.5 billion at the time of writing, have moved to exchanges in the last three weeks.
This movement indicates that traders may be taking profits or minimizing losses, both of which are considered bearish signs.
Source: Glassnode
When traders transfer significant amounts of ETH to exchanges, it typically signifies an intention to sell, which can add downward pressure to the price.
BTC & ETH ETF outflows persist
Furthermore, outflows from Ethereum and Bitcoin ETFs also point to a bearish trend. The net flow for Ethereum ETFs has turned negative, with outflows of $9.8 million as of September 18, 2024.
At the same time, Bitcoin has seen outflows totaling $52.7 million, amplifying worries about a market-wide decline. Ethereum ETFs continue to experience outflows, while Bitcoin ETFs have also shifted negative after four days of inflows.
Source: SpotOnChain
Read Ethereum’s [ETH] Price Prediction 2024–2025
This pattern, particularly during critical market phases, hints at prevailing bearish sentiment or periods of consolidation.
While it remains uncertain whether we are definitively in a bear market, these indicators imply that Ethereum’s price may encounter challenges in making upward movements in the near future unless there is a significant shift in market conditions.
