Key Notes
- The derivatives market shows a call-heavy positioning with a put-to-call ratio of 0.46 and key strike levels at 2,700-3,100 for calls.
- Institutional futures traders prefer spreads and strangles over directional bets, with put spreads at 13.9% and call spreads at 10.1%.
- Max pain levels trend toward $2,800, suggesting potential upward pressure despite weak put protection until $2,200.
As Bitcoin BTC $83 672 24h volatility: 0.1% Market cap: $1.66 T Vol. 24h: $314.16 B struggles near the $85,000 mark, the growing bearish influence over the crypto market fuels a downturn in altcoins. The biggest altcoin, Ethereum ETH $2 281 24h volatility: 0.6% Market cap: $275.10 B Vol. 24h: $94.39 B , is down at $2,310, creating its fourth consecutive bearish candle.
Currently, ETH trades at a market value of $2,309, nearing a local support trend line. As the broader market remains bearish, the declining trend in Ethereum warns of a potential breakdown.
Will this breakdown in Ethereum break the $2,000 psychological support, or is a rebound on the horizon?
Ethereum at Critical Stage in a Falling Channel
In the daily chart, the Ethereum price trend reveals a falling channel pattern. Within the bearish pattern, Ethereum is close to testing its local support trendline amid the recent crash.
Ethereum Price Chart
After breaking under the $2,400 support, Ethereum is close to testing the $2,224 critical horizontal level. Along with the horizontal level, Ethereum’s declining trend pressures the support trendline of the falling-channel pattern.
The declining trend has resulted in a bearish crossover between the MACD and signal lines, suggesting a surge in bearish momentum. However, the daily RSI line floats above the oversold boundary line, teasing a slim chance of a bullish comeback.
Analysts’ Anticipate Reversal Rally
Amid the declining trend, Titan of Crypto, a crypto analyst on X, has highlighted a Wyckoff check accumulation pattern in the Ethereum weekly price chart. On the weekly chart, the Ethereum price trend continues to create lower price rejections near $2,139, highlighting this lower price rejection.
#Ethereum Wyckoff Check – Accumulation Pattern ✔️
The Wyckoff Check is a retest of a key level after a breakout, often confirming trend continuation.
On the weekly chart, #ETH seems to be doing just that.
If this level holds → Potential Spring and rally continuation.📈 pic.twitter.com/PbH9ekY1cS
— Titan of Crypto (@Washigorira) February 27, 2025
He highlights a potential bullish turnaround for Ethereum based on the previous bounce back and the high demand at lower levels. The analyst anticipates a bullish reversal in Ethereum.
Ted Pillows, another crypto analyst, has highlighted a bullish divergence in Ethereum. The bullish divergence comes from the declining Ethereum price trend and the relative strength index.
$ETH bullish divergence.
I'll keep pointing out bullish signs for Ethereum, whether you like it or not.
A short-term rally towards $2,600-$2,700 looks possible. Let's hope it's not a dead cat bounce. pic.twitter.com/p1D68sP7Nv
— Ted (@TedPillows) February 27, 2025
The bullish divergence is highlighted in the 3-hour price frame, which is comparatively less credible compared to a 4-hour or a daily price chart. Nevertheless, the analyst anticipates a short-term rally towards $2,600-$2,700 levels.
Ethereum Derivatives Outlook
In a recent article by Nansen, a crypto research platform highlights the derivatives data analysis projecting a potential bullish turnaround. As per the article, the far-out-of-the-money ETH calls and puts exhibit a high implied volatility of 70-90%. This indicates traders expect significant price swings.
The put-to-call ratio remains at 0.46, suggesting call-heavy positioning (bullish sentiment) in the Ethereum derivatives. The key strike levels, as per the article, remain at $2,700-$3,100 for calls and $2,200-$2,500 for put positions.
The implied volatility for calls remains at 78.57, while the put implied volatility is at 76.49. This is significantly lower as compared to historical levels.
Furthermore, the small call skew of plus 2.08 is seen despite the price being extremely close to put-heavy zones. In the futures market, the institutions prefer spreads and strangles (27.1%) over directional bets.
The put spreads remain at 13.9%, which is greater than call spreads of 10.1%. This highlights a slight bearish tilt in ETH derivatives.
However, the risk reversal showcases a net long bias in the market, with institutions hedging downside risks. In the futures market, the funding rate is slightly negative at 0.004%, which reflects a mild bearish pressure.
Currently, the open interest across all ETFs is significantly higher near the quarterly expirations.
Key Levels and Market Takeaways
As per the analysis, the key level takeaways remain at 2,400-2,500, which is the current battleground between put sellers and call buyers. The max pain levels on Ethereum are trending towards 2,800, suggesting potential upward pressure.
The low DVOL at 68.32 reflects a market underpricing volatility versus historical norms. Furthermore, the weak put protection until 2,200 could accelerate a bearish trend if the support level breaks down.
Hence, the Ethereum derivatives on paper reflect a bullish bias. However, a closing under 2,200 will significantly increase the bearish momentum.
Furthermore, institutions are better hedged than retail traders. Meanwhile, the low volatility pricing may present mispriced opportunities for volatility traders.
Will Ethereum Break $2,000?
As the derivatives market remains slightly optimistic for a bullish reversal, the price trend remains the final truth. A bearish breakdown under $2,200 will likely break under the $2,000 psychological mark. Based on the Fibonacci levels, the downtrend is expected to test the $1,740 horizontal level.
On the bullish side, a potential reversal within the falling channel will test the 78.60% Fibonacci level near the $2,600 mark.
nextDisclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
