A recent analysis by a CryptoQuant analyst suggests that Ether (ETH) could be gearing up for a rally in the near future. This prediction is based on metrics observed in the cryptocurrency’s futures market. Following a significant liquidation event, the analyst, Shayan, believes that ETH may experience a price rally as the market stabilizes, and spot buying pressure takes precedence.
Earlier this month, Ether witnessed a sharp decline, causing the crypto asset to lose nearly 34% of its value. From a high of $3,329, ETH plummeted to $2,197. While this dip raised concerns among investors about further price drops, substantial buying activity around the $2,100 mark helped the asset recover slightly to around $2,500. Currently, ETH is trading at $2,623, marking a 2.3% decrease in the last 24 hours.
Despite the recent recovery of Ether, data from the futures market suggests that the asset may be poised for a more significant rally. The sharp decline triggered a large liquidation of long positions, reaching levels not seen since November 2022. This indicates a cooling of the futures market and the elimination of many leveraged positions. The combination of this development with an increase in spot buying pressure could spark renewed interest in the market.
While Shayan’s analysis points towards a bullish reversal for ETH, a closer look at the asset’s daily and hourly charts may paint a different picture. Ether has shown strong bullish support around the critical $2,100 level and solid demand at $2,000, reflecting investors’ 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 a wedge formed during Ether’s recent downward movement.
The future of Ether in the cryptocurrency market remains uncertain, with conflicting signals from various market indicators. While there is potential for a rally based on futures market data and the recent liquidation event, resistance levels and technical factors may hinder ETH’s upward trajectory. Investors and traders should closely monitor market conditions and developments to make informed decisions regarding their Ether holdings.