Ethereum (ETH) is Hovering Near a Monthly Demand Zone

Let’s start from the weekly timeframe. Ethereum is hovering near a monthly demand zone, and — surprise, surprise — it’s leaving liquidity right underneath it.

In the realm of technical analysis, the pursuit of perfect entries might seem like a futile endeavor.

In the realm of technical analysis, the pursuit of perfect entries might seem like a futile endeavor.

However, I've discovered that there's no need for anything overly complicated. Sometimes, the simplest observations can yield the clearest insights.

Let's commence our analysis with the weekly timeframe.

As we can observe, Ethereum is closely approaching a monthly demand zone. And — to no one's surprise — it's in the process of draining liquidity from the zone below.

Now, you might be thinking, "Oh no, not another post about scanning for liquidity.” But trust me, this is crucial. Whenever price begins leaving a trail of liquidity like this beneath a significant structure, I get this feeling in my gut. It's like we're setting the stage for a grand sweep.

Now, let's zoom in to the daily timeframe.

Here, we can see even more liquidity accumulating at lower levels. It's almost like you can hear the market makers sharpening their instruments of market manipulation.

And yes, I believe that price will eventually drop to claim all of this remaining liquidity. But it's not a matter of a crystal ball; it's a pattern I've observed in my time watching the markets.

Last summer, we witnessed a similar setup with another coin. Price simply remained in a range, like it was trying to appear weak. But then, it swiftly flushes out the liquidity and only then continues its move.

Now, the question is: From what level will this descent begin?

Let's take a look at the H4 timeframe.

Here, we can see a clear supply zone directly overhead. It's a zone where we might anticipate some selling pressure.

Price could potentially rise into this supply zone, encounter resistance, and then swiftly drop to vacuum up all of the remaining liquidity at lower levels.

Of course, this is just one possibility. Ethereum, like any asset, has the autonomy to move in any direction it chooses. These are merely scenarios that we can consider based on the available market data.

My aim isn't to sell you on certainty, but rather on the virtue of patience. If you're thinking of entering a trade here, I encourage you to take a deep breath and wait. It's possible that this supply zone could be absorbed first.

I've certainly been the trader who dives into a trade early, thinking they've caught the move, only to watch it reverse completely. It usually ends with me getting stopped out, and then the market continues in the same direction without me. Fun times.

But in the final analysis, patience is the trader's greatest ally.