Ethereum (ETH), the world’s second-largest cryptocurrency by market cap, appears bullish and poised for a notable upward rally due to its bullish price action and favorable on-chain metrics. Additionally, whales and investors have taken a significant amount of ETH off the exchanges over the past week.
Fall of Ethereum Exchange Reserves
According to on-chain analytics firm CryptoQuant, Ethereum’s foreign exchange reserves have fallen from $42 billion to almost $38.5 billion, a drop of about $3.5 billion. This significant decline in foreign exchange reserves indicates a potential sign of accumulation or takeovers by whales or investors.
Furthermore, the drop in foreign exchange reserves has occurred near an area of strong support, where ETH is currently trading.
Technical analysis of Ethereum and upcoming levels
According to expert technical analysis, ETH appears bullish and is moving within a bullish channel pattern while forming higher highs and higher lows. Currently, ETH is at the lower boundary of the pattern and forming a higher low.
Based on the historical data and price correction, there is a high chance that the asset could rise by 12% to reach the $2,800 resistance level in the coming days. In fact, this level not only serves as resistance but also corresponds to the 200-day exponential moving average (EMA) and the upper limit of the bullish pattern.
This bullish thesis will only hold if ETH stays above the $2,400 level, otherwise it could fail.
Bullish on-chain metrics
ETH’s positive outlook is further supported by on-chain metrics. According to the on-chain analytics company Mint glassETH’s long/short ratio currently stands at 1.36 over the past four hours, indicating strong bullish sentiment among traders. During the same period, 57.76% of top traders opened long positions, while 42.24% opened short positions.
ETH’s open interest is up 4.9% in the last 24 hours and 3.1% in the last four hours. This increasing open interest indicates growing interest from traders in the asset, leading to the formation of new positions.
While the bullish on-chain metrics are examined with technical analysis, it appears that bulls are currently dominating the asset and may continue to support it in the upcoming rally.
Current price momentum
At the time of writing, ETH is trading around the $2,520 level and has seen an upward rally of 1.20% over the past 24 hours. Over the same period, trading volume has increased by 90%, indicating greater participation from traders and investors amid a potential upside rally.
Credit : coinpedia.org
