After rallying all the way to $1,800 ahead of the Merge event last week, ETH has been on a downward journey and constantly under selling pressure. Over the last weekend, the ETH price crashed all the way to $1,300 losing some of its crucial support levels.
The technical chart for Ether (ETH) hints at a further downside for the Bitcoin challenger. This could mean that ETH could correct another 25% from the current price of $1,350, all the way to $1,000. Also, ETH and the broader crypto market have come under further selling pressure ahead of the FOMC meeting on Wednesday, September 21.
Courtesy: Bloomberg As of the recent correction, the ETH price has dropped under its standard deviation of the regression channel drawn from June lows. This opens up the possibility of a retreat to the third deviation of $1,250 and further to the next support level of $1,000.
On the upside, the ETH price has failed to break the ceiling of $1,800. On the downside, ETH made a move under its crucial support of $1,340. As per technical analysis, this breach of support brings the risk of further downside.
Ethereum Derivatives Market
As per the options data from Deribit, there’s a high number of ETH put and call contracts. The ETH open interest currently sits at the strike of $1,000 and $2,000 for September-end expiry. This defines the trading range for Ether. As Bloomberg explains:
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This is part of a controversial theory that says options writers — often financial professionals — make more money than options buyers. The argument is that an asset’s price will move toward the level where options writers make the most profit — that is, where the greatest number of options expire as worthless for buyers. Deribit data puts this maximum pain point around $1,600.
The Ethereum Merge has also drawn the attention of regulators. Ina controversial filing, the U.S. SEC noted that it holds jurisdictions over ETH transactions taking place globally.
