In a surprising turn of events, Ethereum [ETH] has once again picked up its bullish momentum, defying expectations of a downward trend due to increased profit-taking following its recent peak.
The bulls in the ETH market have set their sights on reclaiming a position above $4,000, with the recent momentum driving the cryptocurrency’s price up to $3,950 within the past 24 hours.
Despite a slight dip to $3,912 at the time of writing, the bulls have been making efforts to maintain their current position.
However, there are indications that this surge may only be temporary, as the Relative Strength Index (RSI) suggests the potential for further downside movement in the days ahead for Ethereum.
The unexpected resurgence of bullish sentiment has led to a significant increase in short liquidations, with approximately $187.27 million worth of short positions being liquidated in the past day alone.
In contrast, long positions worth only $78.08 million faced liquidation during the same period.
Investigating the Driving Forces behind Ethereum’s Recent Mid-Week Rally
The sudden mid-week upturn in Ethereum’s performance could be linked to speculation surrounding a prominent figure like Donald Trump.
Reports have surfaced suggesting that a company associated with Trump, known as World Liberty Financial, has recently been actively buying cryptocurrencies, including Ethereum.
According to sources, World Liberty Financial acquired around $5 million worth of ETH, increasing its total holdings in Ethereum to over $55 million.
This acquisition likely contributed to a shift in sentiment, steering away from the bearish trend observed earlier in the week. Nevertheless, it was not the sole factor driving positive sentiment around Ethereum.
The rise of Ethereum ETFs has also played a role in boosting demand for the cryptocurrency and potentially protecting it from further downside risks, as ETFs have recorded positive inflows for the past eight consecutive days.
Will Ethereum maintain its upward momentum or face selling pressure? Recent data indicates that the market has witnessed higher outflows compared to inflows over the past two days.
However, the last 24 hours have shown a balance between exchange inflows and outflows.
The exchange flow patterns for Ethereum suggest a possibility of increased selling pressure prevailing over bullish sentiment in the near future.
Moreover, insights from historical concentration data reveal that Ethereum whales have been accumulating more coins, with their balances rising from 59.39 million to 60.57 million coins between November 9th and December 11th.
While whales continue to increase their holdings, there has been a slight overall decline in Ethereum’s investor class over the past 30 days, with some outflows observed in the retail segment.
This trend indicates that Ethereum whales are better insulated from market volatility compared to retail and institutional traders.