Futures data suggests Ethereum (ETH) could rally soon: CryptoQuant

A CryptoQuant analyst says Ether (eth) could experience a rally soon, as metrics on the cryptocurrency's futures market show.

According to a mail According to analyst Shayan, eth has just witnessed a significant liquidation event, and historically, such events are typically followed by price increases as markets stabilize and spot buying pressure dominates.

eth could recover soon

Earlier this month, the price of eth took a downward trajectory, causing the crypto asset to lose nearly 34% of its value. According to CoinGecko ethereum” data-wpel-link=”external” target=”_blank”>dataEther fell from $3,329 to $2,197.

The drop sparked speculation from investors on whether the cryptocurrency would fall further; however, significant buying activity near the $2,100 region saw the asset recover slightly to the $2,500 level, where it remains. At the time of writing, eth was trading at $2,623, down 2.3% over the past 24 hours.

Although ether has seen some recovery, futures market data suggests that the asset could see a more significant rally. The recent drop triggered a massive liquidation of long perpetual positions, reaching a level last seen in November 2022. Shayan said that the liquidation indicates that the futures market is cooling off and that many leveraged positions have been eliminated. Such a development and the increasing spot buying pressure may allow for renewed interest in the market.

“With the futures market potentially restarting, if demand returns, ethereum could be primed for another impulsive bullish surge in the long term. The cooling of the futures market may attract new buyers and stabilize the market, leading to a potential recovery from the recent downturn,” Shayan added.

eth Price Outlook

While Shayan’s analysis suggests a bullish reversal for eth, the asset’s daily and hourly charts may indicate otherwise.

Ether has seen a substantial bullish response near the critical support level of $2,100 and solid demand around $2,000, reflecting investor interest and confidence in its long-term potential. Still, the asset faces resistance at the $2,800 threshold. This resistance level includes the lower boundary of the wedge that was previously broken during Ether’s fall a few days ago.

A recent analysis published in Cryptopotato revealed that as eth continues to regain momentum, the $2,800 level could hamper the upward momentum and trigger a reversal to the $2,000 support level.

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