Ethereum is tracking the general sentiment in the market as Bitcoin and other cryptocurrencies are heading towards previous highs. The second cryptocurrency by market capitalization made some gains during today’s trading session but appears ready to retest its lows before moving to the upside.
At the time of writing, Ethereum (ETH) is trading at $1,300 with a gain of 2% in the last 24 hours and last week. Contrary to previous highs, the price of ETH is lagging larger cryptocurrencies, such as Bitcoin, the first cryptocurrency to post a 4% profit over the same period.
Ethereum at a critical point, will it finally erupt?
Today’s bullish price action appears to be driven by a recovery across older financial markets, with the S&P 500 and Nasdaq 100 trading in the green giving crypto room to run. The bullish price action is leading to a change in sentiment across the digital asset class as investors have become bullish.
Over the weekend, with traditional markets closed, the situation was different and market participants were bracing for a possible pullback. According to a pseudonymous trader, Ethereum has seen its Open Interest (OI) rise against the US Dollar.
This increase in OI was recorded as the cryptocurrency headed to the downside. Therefore, the analyst claims that the metrics hinted at a sudden spike in short positions from traders anticipating further declines in the short term.
The liquidity provided by these short positions builds up to the upside, making each rally stronger and fueling more upside momentum. However, the analyst believes that the market may take this bullish liquidity before retesting the support levels. pseudonym dealer Wrote The following is on his official Twitter account:
Yesterday you said that there was a lot of short buildup on ETH. They are under pressure now. Once that’s done, he gets slapped again I think. Seems like a clean short setup.
In case of a potential downside, data from Material Indicators shows that the $1,280 and $1,250 region has the greatest concentration of supply (buy) liquidity on the lower time frames. These levels may provide the bulls with solid support to either resume bullish momentum or send ETH back into accumulation mode.