As Bitcoin and other cryptocurrency make their way towards new highs, Ethereum follows the overall market sentiment. The second cryptocurrency by market cap knocked some gains over today’s trading session but seems poised for a re-test of its lows before moving to the upside.
Ethereum (ETH), which trades at $1300, has a 2% profit over the past 24 hours and a week. Unlike in previous rallies, ETH’s price is lagging larger cryptocurrencies, such as Bitcoin, the number one crypto that records a 4% profit over the same period.
Ethereum at Critical Point: When will it break out?
Today’s bullish price action seems to be prompted by a rebound across legacy financial markets, the S&P 500 and Nasdaq 100 have been trading in the green giving cryptocurrencies room for a run. Bullish price actions are causing investors to become optimistic, leading to an overall shift in sentiment.
Traditional markets were closed over the weekend and the market situation was not the same. Market participants prepared for a possible leg down. An anonymous trader claims that Ethereum witnessed a surge in Open Interest against U.S. Dollars.
The cryptocurrency was trending to the downside, so this OI increase was observed. The analyst believes that this indicates traders who expect further downside to cryptocurrency in the near future.
These short positions provide liquidity to the upside which makes each rally more powerful and boosts bullish momentum. The analyst thinks the market may take advantage of this liquidity to the upside before testing support levels again. This is the pseudonym of a trader wroteFollow his Twitter feed to see the complete article:
Yesterday, I stated that $ETH had a short-term buildup. They’re getting squeezed now. Once that’s done it gets slapped back down I think. This looks clean and simple.
Material Indicators’ data indicates that areas between $1,280 & $1,250 have the highest concentrations of bid liquidity (buy) on short timeframes. These levels may provide strong support for bulls to keep ETH in accumulation mode or resume bullish momentum.