Ethereum has almost made back the gains from previous weeks with yesterday’s upside move and could be gearing up for another push above resistance. Second cryptocurrency in market capital is following market sentiment and experiencing some relief, after macro forces have diminished.
Ethereum (ETH) is trading at $1,330 as of this writing. It has a 9% profit for the last 24 hours, and a 2% decline over the week. ETH, along with Solana and Bitcoin (BTC) are the top-performing crypto assets in the crypto top 10.
Ethereum Bulls Will Squeeze out The Shorts!
The U.S. Consumer Price Index report (CPI), which is the standard for inflation, showed that yesterday’s volatility in the crypto market was high. It printed 8.2% in September which beat expectations and drove Bitcoin and Ethereum to below critical support.
The market reversed its course after taking liquidity to the upside. It retraced to the same range where it was cutting out long and short positions. An anonymous trader claimed that volatility made it impossible to liquidate sellers who bet on Ethereum’s future price movements.
This has led to a rise in the Open Interest for Ethereum futures contract contracts (OI) that’s been increasing for several weeks. In the coming days, if bulls can sustain the bullish momentum, the liquidation of these shorts could provide the fuel for a rally into the $1,700 area where ETH’s price stood before “The Merge”. Trader pseudonym notedThese are the things:
Despite today’s volatility and high amount of long liquidations, open interest is still quite elevated. Clearly there’s still a whole bunch of shorts open. The fact that they haven’t covered much at all at the range low indicates greed. They must close.
What Can ETH Do If It Is Wiped Out?
Larger cryptocurrencies have returned to the price range they had been trading for over a year, just as we mentioned. According to the trader, Ethereum may break through local resistance around $1,300, and move into the $1.400 region.
As seen in the chart below, yesterday’s downside price action was violent but short-lived. If the short positions are liquidated, something similar might happen on the upside.
In the interim, due to the weekend’s low volume, the cryptocurrency market might experience a retest of lower levels, before gaining momentum for another rally. The chart below shows Ethereum’s channel top at $1.400. The trader pseudonym added:
Considering that the entire CPI dump got fully retraced on such high volume I’m inclined to believe that we now commence our adventure back towards the top of the range. The 1200 area makes sense to long, doesn’t make sense to short, at least in my head.