ETH Technical Analysis Jan 22

Volume story – what participation tells us about conviction

Volume Profile and Market Participation

ETH’s 24-hour trading volume reached 26.97 billion dollars, indicating participation about 15% above the 7-day average volume. Despite the price rising 1.92% under downtrend dominance, this volume increase shows the market drawing an indecisive profile in terms of conviction (determination). Examining the volume profile, the POC (Point of Control) level is concentrated around 3,050 dollars; this area stands out as the point of highest trading volume accumulation over the last 3 days. From a market participation perspective, volume in down moves has remained higher compared to up moves – for example, volume spikes were observed in the decline waves over the last 24 hours, while volume is relatively subdued in the current 1.92% rise. This signals insufficient participation for a healthy bullish reversal. Short-term volume, 20% below average, reflects retail-focused trading; institutional flows remain hidden at deeper levels. The volume profile’s high volume nodes (HVN) are concentrated in the 3,000-3,100 band, while low volume nodes (LVN) point above 3,200 – weak participation should be expected as price approaches this area. Overall, the volume story supports downtrend continuation; while price alone gives a bullish signal, volume confirmation is lacking.

Accumulation or Distribution?

Accumulation Signs

In the last week’s volume profile, a clear volume increase is observed at the 3,007 dollar support level (score 72/100), signaling potential accumulation zones. While price is suppressed below EMA20 (3,134 dollars), decreasing volume in down moves (dry-up before volume climax) suggests smart money accumulating at lows. Despite RSI at 43.28 in the neutral zone, volume divergence is positive: volume decreases as price falls, a classic accumulation pattern. In MTF context, the 1S/3R breakdown on 1D and 3D timeframes highlights accumulation opportunities at short-term supports. If volume drops below 25 billion dollars and price holds at 3,007, the accumulation phase signal strengthens.

Distribution Risks

Conversely, volume spikes at resistance levels 3,085 (score 77/100) and 3,174 indicate potential distribution traps. The 1.92% daily rise occurred on low volume, implying weak hands covering shorts but sellers waiting ready. MACD bearish histogram with volume upticks creates no divergence – on the contrary, low participation in up moves is a red flag for distribution. On the 1W timeframe, 3R levels (including 3,246) are filled with high volume rejections; institutional selling may be concentrated here. If volume exceeds 30 billion, aggressive distribution risk increases – downtrend continuation likely.

Price-Volume Harmony

Although price action shows a 1.92% recovery within the downtrend, volume confirmation is weak: the uptick volume is below the 3-day average. For a healthy rally, volume in up moves needs to exceed 1.5x the average; here it’s the opposite – high volume on down candles confirms bearish conviction. Divergence analysis: While price is far from Supertrend resistance at 3,372, the volume profile is widening but POC is shifting lower. RSI at 43 is near oversold, but volume doesn’t support it – fakeout risk is high. In MTF, 12 strong levels (mixed S/R) make breakouts unreliable without volume confirmation. In summary, while price looks bullish alone, volume emphasizes bearish bias; for healthy continuation, volume dry-up in down moves is essential.

Big Player Activity

At the institutional level, activity is evident with large block trades comprising 40% of 24h volume: whale accumulation traces around the 3,050 POC, but off-exchange volume spikes at 3,100 resistance reflect selling pressure. Over the last 72 hours, volume delta is negative – buyers are not aggressive, sellers dominant. Per institutional patterns, low volume rallies in downtrends are typical traps; true big player entry requires sustained high volume. No net outflow in whale wallets, but exchange inflows may increase at supports below 3,000. Although exact positions are unknown, the volume footprint is seller-heavy.

Bitcoin Correlation

BTC at 90,042 dollars +0.92% in downtrend; Supertrend bearish and dominance cautions alts. ETH is tied to BTC with 0.85% correlation – if BTC supports 89,023/87,264 break, ETH falls below 3,007. BTC resistances above 91,098 breakout carries ETH to 3,200 but fakeout if volume low. BTC bearish context delays ETH accumulation; monitor BTC levels critically for ETH Spot Analysis and ETH Futures Analysis.

Volume-Based Outlook

Volume outlook has bearish bias: bearish targets point to 2,000 dollars, while bullish hold at 3,000 requires volume dry-up. Short-term 3,007 support test with volume increase signals reversal; otherwise distribution accelerates. Long-term, spikes above average volume confirm accumulation – currently participation lacks conviction. Trade strategy: Wait for volume confirmation, integrate with MTF levels. Volume shows downtrend strength beyond price.