Ethereum [ETH] experienced a significant 10% imbalance in buy orders within the 0-5% range of the order book, indicating a possible scarcity of supply and increased demand at the price level near $3,886.76.
These price levels saw a 10% higher preference for buying, suggesting a stronger interest in purchasing ETH compared to selling.
This disparity reflected a bullish sentiment as more traders showed willingness to buy ETH at or above the market price, potentially driving prices upwards if the trend continues.
Furthermore, there were spikes in trading volume that coincided with notable price movements in both directions.
The growing dominance of buy orders and heightened trading volumes point towards a potential ongoing bullish trend for ETH. Past patterns indicate that such imbalances often precede price surges.
Increased Inflow of ETH into Exchanges
However, there was a notable surge in the volume of ETH being moved into exchanges, increasing by 208.96% over the last 24 hours. This could suggest that investors are transferring ETH to exchanges, possibly to secure profits or prepare for potential selling.
On a weekly basis, there was a 17.57% decrease in the volume of ETH being sent to exchanges, indicating a lower amount compared to the previous week. This decline might indicate a reduction in selling pressure.
Conversely, the monthly change showed a 61.49% increase, suggesting a higher inclination to transfer ETH into exchanges over the past month compared to previous periods.
This influx could moderate the optimistic outlook indicated by the order book ratio, which pointed to low supply and high demand.
Increased inflows hint at potential selling pressure that could cause a temporary drop in ETH prices regardless of positive demand signals.
Exploring Potential Price Bottoms for ETH
Considering these factors, ETH might be primed for a modest pullback before resuming a bullish trend, currently trading around $3689 following a retreat from the resistance near $4,082.
Trade volume rose during sell-offs, suggesting a decline, but with the RSI dipping into the oversold region, below 30, there’s a hint of an excessively bearish phase that could trigger a reversal if buyers engage.
Breaking below the 20EMA and 50EMA indicated a short-term bearish trend, contrasting with the potential support offered by the 200EMA for the long run.
Ethereum displayed signs of testing a critical support level near the 200EMA at around $3,500, showing a chance for a reversal, as signaled by the oversold RSI.
If this level holds, a move towards higher price points could be expected, especially as funding rates hit multi-month highs, indicating rising trader confidence and expectations of increased prices.
The surge in funding rates above 0.04%, coupled with price fluctuations, represented a notable increase in trader leverage, often foreshadowing price volatility.
Elevated funding rates reflected robust bullish sentiment in the market, yet they could trigger short-term corrections due to excessive leverage.
The resurgence of high funding rates akin to those in early 2024 demonstrated substantial market participation and optimism. Nevertheless, this could pose a correction risk if the market becomes overheated.