An analyst from CryptoQuant has indicated that Ether (ETH) may be on the brink of a rally based on metrics observed in the cryptocurrency’s futures market. The analyst, known as Shayan, highlighted a recent significant liquidation event in ETH, noting that historically, such events are typically followed by price rallies as markets stabilize and spot buying pressure increases. This analysis suggests a potential positive trajectory for ETH in the near future.
Earlier this month, ETH experienced a downward trend that led to a decrease of almost 34% in its value. CoinGecko data shows that Ether dropped from $3,329 to $2,197, sparking concerns among investors regarding the cryptocurrency’s future direction. However, a surge in buying activity around the $2,100 region helped ETH regain some ground, pushing the price back up to around $2,500, where it currently stands at $2,623. While the asset has seen some recovery, data from the futures market suggests the possibility of a more substantial rally in the coming days.
The recent decline in ETH triggered a wave of liquidation in long perpetual positions, reaching levels last seen in November 2022. This mass liquidation signals a cooling off of the futures market and the removal of many leveraged positions. As a result, there is now room for increased spot buying pressure and renewed market interest. Shayan believes that with the potential reset of the futures market, coupled with a return in demand, ETH could be primed for a bullish surge in the long run. The stabilization of the market could attract new buyers and pave the way for a recovery from the recent downturn.
Conflicting Indicators on ETH’s Price Movement
Despite the optimistic outlook presented by Shayan, the daily and hourly charts of ETH paint a slightly different picture. While there has been a strong bullish response around the critical $2,100 support level and solid demand at $2,000, the asset is currently facing resistance at the $2,800 threshold. This resistance level coincides with the previously breached lower boundary of the wedge formation during Ether’s recent price drop, indicating a potential obstacle to further price appreciation.
The analysis of ETH’s futures market suggests a possible rally in the near future, driven by a combination of market stabilization, increased spot buying pressure, and the cooling off of leveraged positions. However, conflicting indicators on the asset’s daily and hourly charts point to potential resistance levels that may impede its upward momentum. Investors should closely monitor market developments and price movements to make informed decisions regarding their ETH holdings.
