Ethereum, the second-largest cryptocurrency by market capitalization, is showing signs of recovery. However, the price is still below its previous peaks, reflecting a cautious market sentiment.
Current Market Situation
At present, Ethereum is trading at $2,661, a 1.6% increase over the past day. This follows a period of decline, with Ethereum reaching a low of $2,545 last week.
Market Sentiment
Despite the recent uptick, Ethereum’s price is still about 45% lower than its all-time high of $4,878, recorded three years ago. This raises questions about whether Ethereum is on the brink of a more sustained recovery or if the recent price movements are merely a temporary correction. CryptoQuant analyst Burak Kesmeci believes that Ethereum may be in the late stages of its correction, based on on-chain metrics that suggest a shift in market sentiment. Kesmeci points to two key datasets: the Taker Buy Sell Ratio, which measures the ratio of buyers to sellers across all exchanges, and Open Interest (OI), which represents the total number of open long and short positions in the market.
Ethereum’s Potential Rally
Kesmeci’s analysis suggests that buyers are regaining strength, which could be an early sign of a potential rally. However, the broader market has experienced the impact of Ethereum’s 24-hour recovery, with a total of 43,521 traders liquidated, amounting to $111.52 million. Ethereum accounted for $26.63 million of these liquidations, mainly long positions. Another important factor is the movement of Ethereum out of exchanges. Data shows a consistent increase in Ethereum exchange outflows over the past week. This typically indicates that investors are moving their Ethereum holdings into long-term storage, reducing the supply available for trading on exchanges. This behavior often suggests a bullish outlook among investors, anticipating higher prices in the future.
While these factors offer a promising outlook, the current market conditions continue to challenge Ethereum’s recovery. As Kesmeci concludes, “Current data shows that buyers in Ether are gradually regaining strength. However, time will tell whether this is a temporary rebound or the start of a strong rally led by the bulls.”
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