eth has recently demonstrated resilience, holding support around the critical threshold of $3,200, leading to a period of consolidation with minimal price movements.
However, there are signs pointing to a possible increase in buying interest in the medium term, possibly putting ethereum on a trajectory to surpass its yearly high of $4.1K.
A thorough analysis of the daily chart shows eth's ability to withstand further selling pressure, finding strong support around the $3.2K mark. This zone coincides with key Fibonacci retracement levels between 0.5 ($3,190) and 0.618 ($2,972), further strengthened by the critical 100-day moving average at $2,972.
This confluence of support levels suggests major hurdles for sellers attempting to lower prices, indicating predominant buying and demand activity on ethereum's downward trajectory.
However, eth is currently in a sideways consolidation phase, with many market participants anticipating a bullish resurgence aimed at reclaiming the yearly high of $4.1K in the medium term.
Drilling down into the 4-hour chart, a multi-week sideways wedge pattern can be seen forming, with eth price approaching the apex of this increasingly narrowing range. Despite this consolidation, the recent price indicates a strong presence of buyers around the crucial $3,000 support zone, resulting in a modest bounce towards the upper boundary of the wedge.
As the cryptocurrency approaches the pattern's increasingly narrowing range, a breakout in either direction appears imminent in the near term. A possible rejection and break below the lower boundary of the wedge could pave the way for a bearish extension towards the substantial support at $2,900.
However, considering the prevailing market conditions and the dominance of buyers in the perpetual market, a more likely scenario involves a break above the pattern, with ethereum targeting its next resistance at $3,700.
Overall, higher volatility and significant sell-offs are expected in the futures market, calling for caution among market participants.
The recent consolidation of ethereum price, following its rapid rise towards the $4,000 mark, calls for a closer look at sentiment indicators in the futures market to assess possible future moves. Analysis of funding rates and open interest metrics offers valuable insight into the prevailing sentiment among market participants.
The funding rates metric, along with open interest, serves as a barometer of the aggressiveness of buyers and sellers in executing their orders. In general, positive values on these metrics suggest bullish sentiment and increased activity in the perpetual market, while negative values indicate a more cautious or pessimistic stance.
Upon inspection of the chart, it is notable that as the price of ethereum experienced a notable uptrend, there was a corresponding increase in the funding rates metric. This indicates aggressive execution of long positions by participants. Similarly, the uptrend in the open interest metric also reflects increased activity, indicating an overall heated state in the futures market.
Given these metrics, the market appears poised for another significant move in the medium term, with the possibility of long positions being re-established in the perpetual market. This suggests a favorable outlook for ethereum's price trajectory, which could push it towards its all-time high.
