Was the Ethereum Price Rise Due to the Infini Hack? Is the Bullish Momentum Fading off?

The market volatility was expected to increase as it heads towards the end of the monthly trade; however, the rise in the volatility has strengthened the bears. Bitcoin yet again slipped below $96,000 but the broader markets continued to remain stable as Ethereum demonstrated strength. The second-largest token sustained above $2,700, showing an unconventional price action against Bitcoin. Hence, the current trade setup favors the bulls, aiming to reclaim the local highs at $3000. 

In the middle of the rising bullish sentiments, there could be some possibility of the current upswing turning into a short-term rise, which may trap the bulls. In a recent update, a crypto-focused neobank, Infini, has reportedly suffered an exploit worth more than $49.5 million. These stolen funds were being swapped to DAI and used to purchase ETH, which has increased the buying pressure over the token. 

As a result, the ETH price scaled up to rise above $2840 and triggered a notable selling pressure. Currently, the price is struggling to sustain above $2700 as the upward pressure has increased, which could be probably due to millions of ETH being sold by the popular exchange, Binance. 

While the potential reasons for the dump are not clear at the moment, some feel it to be a conventional Monday-Tuesday shakeout and later the whole week to be in green. Meanwhile, it is also speculated to be a market-making strategy, which could be a part of a larger strategy. So what’s next for the ETH price rally—a short squeeze or a continued descending trend?

Ethereum (ETH) Price Analysis

Ethereum price is defending the ascending support that has been strong support for over the past 5 months. During the past weekend, the price leapt above the support zone and almost cleared the resistance at $2,772. Meanwhile, the bulls fell short of strength in keeping up the momentum to drag the levels above $2,900, causing a drop below $2,700 at the moment. Currently, the deliberately mounting buying pressure over Ethereum is fading, which could be a matter of concern for the second-largest token. 

The above chart shows the mounted buying pressure is fading as the price has printed a massive bearish candle after failing to reach $2900. The CMF saw a sudden drop below 0 hinting towards a huge signal of market weakness. Besides, the +Di & -Di of DMI were about to undergo a bullish crossover but have deviated from each other. Therefore, the ETH price is now approaching the ascending trend line close to $2650 and if it fails to defend, it may head to the lower support zone between $2567 and $2541. 

However, the Ethereum price is not likely to test this support zone, as the ascending support could offer a strong bullish momentum to trigger a strong rebound towards the broken resistance at $2,772.