Ethereum bulls pushed its price to around $2,200 on Thursday amid a market recovery.
Conclusion
- Ethereum price rose to a 4-week high on Friday amid increased demand from institutional traders and increased short liquidation.
- ETH has formed a double bottom pattern on the daily chart.
According to crypto.news, the price of Ethereum (ETH) rose more than 11% to hit a 4-week high of $2,192.
Ethereum prices rose amid a broader market recovery led by Bitcoin. Zanban withdrew $73,000 for the first time since early February amid reports that the U.S. and Iran may be in talks to end their military standoff.
When the price of ETH rose, it caused traders to short with highly leveraged short bets in the derivatives market. Data from CoinGlass shows that more than $133 million in short positions were liquidated in the last 24 hours, compared to only $21.5 million in long positions.
The return of inflows into Ethereum ETFs also seems to indicate that institutional investors have played an important role in the recovery. Ethereum spot ETFs traded $169.4 million yesterday, according to data compiled by Farside Investors.
At the same time, Ethereum’s open interest increased by almost 15%, which is a sign of increased activity in the derivatives market after several days of stagnation. While the weighted funding ratio remains negative at press time, if it continues to rise, a shift to positive funding ratios could signal a reversal of bullish sentiment.
This increase in activity indicates that traders are once again positioning themselves aggressively, potentially setting the stage for more volatility if price breaks key resistance levels.
On the daily chart, the price of Ethereum has formed a double bottom pattern, which is a major reversal pattern formed by two consecutive troughs. The neckline of the pattern is located at the psychological resistance level of $2200.
A break from the neckline could push Ethereum to $2,400, which corresponds to the 38.2% Fibonacci retracement level, which is often seen as an important target for a trend reversal.
It should also be noted that a successful reversal of the $2,400 mark cancels a larger flag pattern forming on the chart.
The main technical indicators seem to indicate that the bulls are already on the move. It is worth noting that the MACD lines formed a bullish crossover and pointed upwards, while the Aroon Up showed a reading of 92.86%, well above the low of 35.71%.
Currently, traders are looking at $2,142, the 23.6% Fibonacci retracement level, as key resistance. At the time of writing, ETH was trading at $2,117, just 1.1% below that mark.
Disclosure: This article does not provide investment advice. The content and materials on this page are for educational purposes only.
