Ethereum Struggles to Impress in Bull Cycle, But a Breakout May Be Imminent

Despite being the second-largest cryptocurrency by market capitalization, ethereum (eth) has failed to live up to expectations during this bull cycle. Unlike bitcoin and its rival altcoins, which made impressive gains and hit new highs, eth has been unable to recapture its 2021 peak.

However, a long-awaited bullish reversal could soon change this narrative.

New ATH for ethereum

According to the latest analysis According to CryptoQuant, there has been a notable increase in ethereum's open interest (OI), hinting at a possible breakout as well as a possible bullish rally. The open interest metric, which tracks active futures contracts across exchanges, has been rising steadily and reaching record levels. This increase is indicative of increased trader activity, with a significant increase in opening long positions.

However, it is important to note that ethereum price has not yet reflected this uptick in futures activity, creating a divergence between market expectations and actual price movements. According to data from the on-chain analytics platform, this imbalance indicates increasing pressure in the market.

To make matters worse, high open interest also increases the likelihood of liquidation cascades, which could trigger abrupt and substantial price swings.

While the precise direction of the breakout remains uncertain, the prevailing sentiment is bullish. If ethereum breaks key resistance levels, it may trigger a sustained rally, potentially establishing a new trend in the market.

Breakout Could Take eth To $20,000: Analyst

ethereum's poor performance compared to other major altcoins caused frustration among its community. Additionally, criticism of co-founder Vitalik Buterin's periodic eth sales, centralization concerns linked to major holders, and regulatory compliance issues have fueled doubts about ethereum's future trajectory.

Despite these challenges, Santiment noted that this negativity could create an opportunity for recovery, as markets often move against sentiment.

This aligns with CryptoPotatoes recent report, which also noted that ethereum may be gearing up for a significant comeback, with analysts predicting possible price targets of $4,000 to $20,000 if it breaks the critical resistance of $3,550. The crypto asset saw a 4% increase in the last 24 hours, trading just over $3,400.

This bullish trend was fueled by a broader cryptocurrency market rally and higher holdings by Trump-associated World Liberty Financial, which recently added 3,079 eth to its portfolio. Optimism also emerged from President Trump's executive order to explore a “national reserve of digital assets,” which could boost cryptocurrency adoption.

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