After making a decent comeback this year, hopes are high for Ether, the second-largest cryptocurrency by market cap. With continuous growth in network and price value, sentiments shared by market players have become increasingly positive. The asset’s recent upclimb above the $3,500 price level has positioned Ether as an attractive altcoin, and market experts are outlining the possibilities for the asset in the coming months.

Ether kicked off the new year slowly, with an opening price of $2,352, and recorded a decline, leading to a breakout below the $2,000 price level in the same month. The asset has since maintained an upward trajectory as it climbed from the $1,500 significant support level to surpass $3,600.

Sharing insights into what the possible future could look like for Ether, a Santiment analyst showed that the market chart depicts the open interest metrics across multiple exchanges. This represents a total number of open futures contracts despite their trading pattern. 

“Higher values signify increased confidence among futures traders in the prevailing trend, while lower values indicate uncertainty. Moreover, heightened open interest often correlates with heightened price volatility, amplifying the probability of cascading liquidations.” The analyst asserted. 

The chart also illustrates a notable spike in open interest, which correlates with Ethereum’s upward price trend. This pattern would eventually get to its peak in July 2022 and further indicate that futures trades are confident in Ethereum’s present uptrend. Although the positive sentiments hint that investors trust Ether to surge to new levels, market volatility could still affect prices in the future. 

As the analyst explained; 

“However, given the impulsive nature of the recent ascent, traders should exercise caution and consider the potential for sudden liquidation events, which could trigger notable short to mid-term price declines.”

At the time of this report, Ether is trading for $2,928. The 1-day technical chart shows that Ether started the day on a bullish note, which led to a daily price high of $3,599.

After briefly hitting a new yearly and daily high, Ether bulls lost momentum, and selling pressure has since increased. With an increased bearish momentum, Ether has lost over 20% in trading volume and market cap value. Continued downward movement could result in a break below current support levels. However, in the long term, Ether is still well on its way to breaking above $4,000 and potentially retesting previous highs.

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Filed under: Bitcoin - @ March 4, 2024 7:58 pm