Ethereum (ETH) is again in the spotlight after a strong rise in price. The second largest cryptocurrency recaptured the important price level of $ 2,600 in the last 24 hours. The big question now is whether Ethereum has enough strength to push through towards $ 2,800, or whether we see a rejection again.
Short Squeeze points to changing sentiment
ETH increased by more than 6 percent in the last 24 hours and this increase led to a big short squeeze worth nearly 90 million dollars.
Short squeeze
With a short squeeze, traders who speculate at a price drop (short positions) are forced to close their position quickly if the price rises unexpectedly. They do this by buying the coin back, causing extra purchasing pressure and pushes the course up even harder.
On the daily graph we see that Ethereum is at a crucial point. At the beginning of June, the total number of outstanding derivatives contracts still peaked on a record of $ 41.75 billion, just after ETH briefly hit $ 2,800.
Nevertheless, the number of large Whale-Wallets, with more than 10,000 ETH, continued to fall to the lowest level since 2016. This development already indicated that confidence among large investors was declining.
After that peak, a sharp correction followed: Ethereum lost almost 25 percent and dropped back to almost 2,100. Bitcoin (BTC) only fell 10 percent in the same period. Nevertheless, Ethereum kept surprisingly strong. After the correction, the race stabilized between $ 2,400 and $ 2,500 for ten days, which may indicate a phase of silent accumulation. Now ETH seems to be on its way to the top of the range: the level of $ 2,800.
Balance in the market: crucial tipping point
At the moment the market structure is on sharp. The lung/short ratio (on Binance is balanced with a ratio of 50:50. Such moments of balance usually do not last long. In the coming days it will become clear whether the Bulls will have sufficient momentum to realize a further increase towards $ 2,800.
Interestingly, large capital flows took place on 2 July. Whales moved more than 3 billion dollars in ETH, with 45,155 ETH, among other things, departing from Kraken and 60,000 ETH from Arbitrum to Binance.
At the same time, institutions continue to purchase quietly. The asset manager BlackRock increased its Ethereum positions (because of his own stock market fund) on 29 of the last 30 trading days.
Fundamentally, Ethereum is also strong. The number of daily transactions has risen to 1.45 million, a level that we last saw during the Bullmarkt of 2021. Defi loans also increased by 43 percent in the past quarter.
The recent breakthrough above $ 2,600 seems to be more than a short -term revival. If Ethereum knows how to maintain this level, a follow -up towards 2,800 is obvious. This level will form the large test and determine whether an increase towards 3,000 dollars is the next stop.
Source: https://newsbit.nl/ethereum-koers-wint-6-tijdens-cryptorally-is-3-000-nu-haalbaar/
