In recent sessions, the leading altcoin Ethereum has hovered around the $4,700 level, indicating a decline in market momentum as activity from both buyers and sellers diminishes.
With technical indicators suggesting a decrease in market volatility, ETH may remain within a limited range for the time being.
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Ethereum Price Stuck in a Tight Range as Traders Wait for Volatility to Return
Analysis of the ETH/USD one-day chart shows that the altcoin has exhibited a narrow trading range over the last three sessions. Since Monday, ETH has encountered resistance at $4,742 and discovered support around $4,426.
This sideways motion occurs during periods of decreased market volatility, reflecting an equilibrium in buying and selling activity.
The reduced volatility is evident in ETH’s Average True Range (ATR), which has begun to drop. Currently, this indicator, which assesses the extent of price fluctuations over time, stands at 176.54.
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When the ATR declines, it indicates that market players are becoming more cautious and less inclined to take risks. This results in reduced price fluctuations and lower trading volumes, keeping the asset confined within a range.
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Additionally, ETH’s stabilizing Relative Strength Index (RSI) supports this observation. Currently, it is at 54.07.
The RSI measures the overbought and oversold conditions of an asset, ranging from 0 to 100. Values exceeding 70 suggest that the asset is overbought and may decline, while those below 30 indicate that it is oversold and could rebound.
A stable RSI signifies a balance between buying and selling pressures, underlining that neither side has dominance at present. This balance corroborates the low market volatility; if it continues, ETH’s price might remain restrained within its narrow range.
Ethereum Traders on Edge
Although periods of low volatility imply market stability, they also indicate that traders are less engaged, often preceding a sharp breakout in either direction.
Unless volatility resumes, ETH may stay within its existing support and resistance boundaries. If selling pressure intensifies, it could breach the support threshold, leading to a price drop toward $4,211.
Conversely, if fresh demand enters the market, this bearish outlook could be overturned. In such a case, ETH’s price might rise above the resistance at $4,742 and strive to reclaim its all-time high of $4,957.
