Ethereum [ETH] has seen a notable recovery in its price recently, trading at $2553 at the current moment.
This represented a 5.25% increase over the last 24 hours, completing a week-long upward trend. In weekly analysis, the altcoin has surged by 9.03%.
Prior to this surge, Ethereum had been on a downtrend, hitting a low of $2251 last week.
Despite the recent increase, Ethereum’s price still remains significantly below its peak in March of $4070. Moreover, it is down by 47.9% from its all-time high of $4878.
As a result, there are doubts about the sustainability of this recovery under the current market conditions. Notably, well-known crypto analyst Ali Martinez has indicated a potential rebound if the $2200 support level holds.
Decoding Market Sentiment
According to Martinez, the TD Sequential indicator showed a “buy” signal on Ethereum’s weekly charts at the current moment.
This points towards a strong possibility of a rebound if ETH manages to stay above the $2200 support level.
TD Sequential is used to identify potential reversal points and exhaustion of trends. Therefore, a “buy” signal on TD Sequential suggests that the downtrend is weakening, hinting at a potential upward reversal.
Consequently, based on weekly data, ETH could potentially sustain its rally and not just experience a temporary bounce.
Positive Outlook for ETH
As per CryptoCrypto’s analysis, Ethereum is displaying a robust upward momentum on the weekly charts. This is due to favorable market conditions that are setting up the altcoin for further increases.
Initially, Ethereum’s OI-Weighted Funding Rate has remained consistent for the past four days.
A positive OI-Weighted Funding Rate usually signifies a significant amount of open interest linked to investors holding long positions.
High Open Interest coupled with a positive Funding Rate implies that traders are leveraging their positions to speculate on price rises, showing confidence in an upward trend.
This optimistic sentiment implies that long position holders are paying short position holders.
Moreover, Ethereum’s Funding Rate Aggregated by Exchange has been positive over the last three days, reinforcing CryptoCrypto’s earlier observation regarding a higher demand for long positions than short ones.
Lastly, Ethereum’s large holder netflow has predominantly been positive throughout the week, only turning negative once on September 14th.
Consequently, over the past six days, ETH has seen more inflow from large holders than outflow, indicating that these investors are accumulating the asset and expressing confidence in its future value.
In conclusion, Ethereum is currently experiencing optimistic market sentiment. If these conditions persist, ETH is likely to challenge the resistant level around $2810 which has proven to be challenging in the past.