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Veteran trader Peter Brandt has recently shared his thoughts on Ethereum’s (ETH) price action. In a tweet that has caught the attention of the crypto community, Brandt shared his thoughts on how he sees trading possibilities, highlighting the importance of having a well-defined risk point in any trade.
"One of the important things I look for in a trade is if it has a well-defined risk point where I can say I am wrong and cut my losses," Brandt wrote.
Brandt applied this principle to Ethereum, noting that ETH currently presents a "well-defined short-side trade." He pointed out that as long as Ethereum remains below approximately $2,830, the trade remains valid.
Tomiwabold OlajideHowever, if the ETH price were to rise above this level, Brandt indicated that the trade would be considered "wrong," and it might be time to exit the position.
"ETH is a well-defined short-side trade. Above 2830 or so the trade is wrong," Brandt mentioned.
Ethereum price dips
Ethereum fell to a low of $2,393 in Tuesday's trading session, marking the third consecutive day of losses since the Aug. 24 high of $2,820.
This comes as cryptocurrencies undo the boost they gained last week from Federal Reserve Chair Jerome Powell's clearest indication yet that the central bank intends to lower benchmark interest rates from a more than two-decade high.
Ethereum dipped 8.30% in yesterday's trading session before trimming some of the losses to trade at around $2,480, down 7.7% in the last 24 hours.
According to CryptoQuant, traders were speculating on increased prices, resulting in a fragile environment. Since Aug. 5, open interest has increased by 31%, from $13.5 billion to $17.9 billion, and funding rates have remained positive, indicating a premium for perpetual contracts.
The already fragile positions start to roll over with Ethereum long liquidations reaching $55 million, marking the highest levels since Aug. 5. Additionally, several traders were stopped out, causing Open Interest to fall by $2.2 billion.
Arman Shirinyan
Alex Dovbnya