Currently, Ethereum [ETH] is being traded at $2,735, marking an 8-week high following a nearly 4% increase in the last 24 hours. Trading volumes have surged by more than 100%, reflecting a growing market interest.
The sharp rise in ETH led to a record number of short positions liquidations within the cryptocurrency market. Over $23 million worth of ETH short positions were closed at the time of writing, as per Coinglass.
High levels of short liquidations imply a bullish trend, indicating that short sellers are transitioning to buyers to settle their positions. The one-day chart for Ethereum hints at a continuation of these positive trends.
Encouraging Signs for Ethereum
ETH managed to surpass the 100-day Exponential Moving Average (EMA) at $2,685, bolstering the uptrend’s momentum. As ETH neared the 200-day EMA, the uptrend encountered resistance.
The 200-day EMA, currently around $2,800, serves as a crucial level for traders. Should ETH decisively breach this resistance, the altcoin may embark on a long-term bullish trajectory, potentially pushing its value towards the 1.618 Fibonacci level exceeding $3,000.
Technical indicators are hinting at a potential breakout above the 200-day EMA. The Chaikin Money Flow (CMF) recently turned positive after almost two weeks, signaling an increased capital inflow into ETH.
Moreover, the Relative Strength Index (RSI) has been climbing, hitting its peak since June, indicating significant buying pressure.
Despite a surge in buyers, Ethereum’s RSI of 66 suggests it is not in the overbought territory, implying further room for growth.
Surge in Open Interest and Leverage Ratio
The open interest in Ethereum has risen to levels unseen since August, per data from Coinglass, touching $14 billion, underscoring heightened participation and capital influx into ETH.
An uptick in open interest is typically optimistic if traders are initiating long positions. However, this surge could lead to heightened price volatility.
Ethereum’s estimated leverage ratio is nearing a three-month peak, indicating an influx of borrowed capital. Sudden ETH price movements could trigger a wave of forced liquidations, contributing to market volatility.
Ethereum Wallets in Profit
Recent gains in Ethereum have driven a surge in the number of wallets in profit. At present, 69% of all ETH addresses are currently in profit, marking a 6% rise in the past week.
Conversely, the count of wallets in losses has dropped to 35 million addresses at present, a significant decline from 42 million addresses in just a week.
As more Ethereum wallets turn profitable, positive sentiments surrounding ETH are likely to prevail.