A recent analysis by CryptoQuant suggests that Ether (ETH) could potentially experience a rally in the near future based on metrics in the cryptocurrency’s futures market. The analyst, Shayan, noted that ETH has recently undergone a significant liquidation event, which historically has been followed by price rallies as markets stabilize and spot buying pressure increases.
Earlier this month, ETH witnessed a downward trajectory, resulting in a loss of almost 34% of its value. The price of ether dropped from $3,329 to $2,197, sparking concerns among investors about the possibility of further decline. However, substantial buying activity around the $2,100 region led to a slight rebound, with ETH currently hovering around the $2,500 mark. As of the latest data, ETH is trading at $2,623, indicating a 2.3% decrease in the past 24 hours.
Despite the recent recovery, data from the futures market suggests the potential for a more significant rally in the near future. The massive liquidation of long perpetual positions following the recent decline indicates a cooling futures market and the elimination of many leveraged positions. This, coupled with rising spot buying pressure, could pave the way for renewed interest in the market.
Shayan’s analysis points towards a bullish reversal for ETH, emphasizing the potential for another impulsive bullish surge in the longer term if demand returns. The resetting of the futures market, along with the anticipated stabilization and potential recovery from the recent downturn, may attract new buyers to the market.
While the overall outlook for ETH appears positive, the asset’s daily and hourly charts may present a different perspective. Ether has shown a strong response near the critical $2,100 support level and has demonstrated robust demand around $2,000, indicating investor confidence in its long-term potential. However, the asset is currently facing resistance at the $2,800 threshold, which includes the previously broken lower boundary of the wedge during Ether’s recent plunge.
While there are mixed signals in the market regarding the future of Ether (ETH), the recent liquidation event in the futures market, coupled with the potential for renewed buying interest, hints at the possibility of a bullish rally in the cryptocurrency’s price. Investors are advised to closely monitor market developments and technical indicators to make informed decisions about their trading strategies.
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