The recent 5.23% surge in Ethereum’s value within a 24-hour period is a clear indicator of increased smart money inflow.
With a notable 30% rise in trading volume and a quick recovery from the $2.5K dip, the question arises: how far can this current upward trend push Ethereum’s price?
Is Ethereum poised to exceed expectations?
The resurgence of risk appetite is evident as futures traders amplify their leverage. In a single day, short positions in Ethereum worth $37.21 million were liquidated, while new positions totaling over $1.5 billion were established.
Both whales and institutional investors anticipated this surge. Significant smart money investments, totaling an additional $100 million, flooded into the market, preventing a potential downturn.
Despite Ethereum appearing to backtrack towards pre-election levels, strong buying pressure at $2.5K effectively supported the price, marking a 32% decline from its post-election peak of $4,016—largely driven by profit-taking motives as over 95% of holders were in profit.
Although this figure has now decreased to 66%, historical trends suggest it may not have yet reached a low point, leaving Ethereum vulnerable to further retracement, particularly in the face of prevailing market uncertainties.
Are More Challenges Ahead for Ethereum?
The ETH/BTC pair recently hit a three-year low, but signs of a bullish reversal are emerging. With the MACD indicator flashing green and Bitcoin stabilizing, it appears that investors are considering a rotation towards Ethereum.
Despite Ethereum’s 5% increase in value, the reserves on exchanges have risen by over 4%, indicating that traders are not entirely committed to the HODL strategy at present.
A correction seems imminent, as a significant 9.9 million addresses, collectively holding 62.14 million ETH, have transitioned into a profitable state at $2,560—potentially setting the stage for a substantial sell-off of around $1.5 billion.
The pivotal question remains: will smart money successfully maintain Ethereum in a consolidation phase before a significant breakthrough, or will waning greed and rising fear trigger a reversal back towards $2,200?
The unfolding days will provide the answer, yet at present, the odds seem to favor the latter scenario.