Ethereum [ETH] has shown signs of a potential price surge following a recent period of market downturns, including an 8.87% decrease in the last seven days. The digital asset has bounced back with a 2.41% increase in the past 24 hours, hinting at renewed trader interest.
Positive Signals for ETH
Analysis conducted by CryptoCrypto indicates several market factors that point to a possible upward trajectory for ETH. The cryptocurrency is currently trading within an ascending channel pattern, often associated with upward price movement. Additionally, Ethereum has formed an inverse head-and-shoulders pattern within this channel, signaling bullish momentum.
If ETH manages to break above the neckline resistance of this pattern, experts suggest a significant price increase of up to 265.84%, potentially pushing the asset towards the $12,000 mark.
Recent market data shows that while a rejection at the neckline caused a temporary downturn, the daily chart suggests a recovery is underway as ETH posts gains.
Increased Liquidity Flow into ETH
There has been a surge in demand for ETH from both institutional and traditional investors in recent days. After a period of consistent selling, traditional investors bought $54.54 million worth of ETH over the past two days, contributing to its price appreciation.
Furthermore, data from ETH spot Exchange-Traded Funds (ETFs) reveal a withdrawal trend from exchanges, with $35.93 million worth of ETH being pulled out since the start of the week. This decreasing supply on exchanges coupled with rising demand could lead to a potential supply crunch.
Upward Trend in Funding Rate
Traders in the derivatives market have been increasingly bullish on ETH, with a rise in buying contracts. The current funding rate stands at 0.0089%, indicating a shift towards a positive sentiment.
Higher funding rates, like the one observed for ETH, suggest a dominance of long positions, with buyers paying fees to balance spot and futures prices. If this trend persists, it could help ETH break through resistance levels, paving the way for a sustained rally and a potential move towards the $12,000 mark.