Ethereum (ETH) Poised for Potential Rally Based on Futures Market Data: Analysis
A recent analysis by a CryptoQuant analyst suggests that Ether (ETH) could be gearing up for a potential rally in the near future, based on metrics observed in the cryptocurrency’s futures market. The analyst, Shayan, highlighted in a post that ETH recently underwent a notable liquidation event, a pattern historically followed by price surges as markets stabilize and buying pressure from spot markets takes over.
Earlier this month, Ether faced a downward trend, resulting in a significant 34% loss in value. CoinGecko data indicated a drop from $3,329 to $2,197. This decline sparked concerns among investors about the possibility of further plunges. However, strong buying activity around the $2,100 mark led to a modest rebound, bringing the asset back to around $2,500, where it currently stands at $2,623, reflecting a 2.3% decrease in the last 24 hours.
Despite the recovery observed in Ether’s price, insights from the futures market suggest the potential for a more substantial upswing. The recent downturn triggered a massive liquidation of long perpetual positions, reaching levels last seen in November 2022. This liquidation signals a cooling of the futures market with many leveraged positions being cleared out. The combination of this development and an increase in spot buying pressure could reignite interest in the market.
Shayan further emphasized that with the potential reset in the futures market, a resurgence in demand could set the stage for a bullish surge in Ether in the long run. The cooling of the futures market might attract new buyers, stabilize the market, and pave the way for a recovery from the recent downturn.
While the analysis points towards a positive turnaround for ETH, assessments of the asset’s daily and hourly charts may present a contrasting view. Ether has demonstrated a strong response near the critical support level of $2,100 and solid demand around $2,000, reflecting investor confidence in its long-term prospects. However, resistance at the $2,800 threshold poses a challenge. This resistance level encompasses the previously breached lower boundary of the wedge during Ether’s recent decline.
A recent analysis highlighted on CryptoPotato suggested that as Ether continues to regain momentum, the $2,800 level could impede upward movement and potentially trigger a reversal towards the $2,000 support level. The evolving dynamics in the cryptocurrency market indicate a mix of optimism and caution as Ether navigates its price trajectory.
