Ethereum has almost regained gains from the previous weeks with yesterday’s bullish move and could be preparing for another push above the resistance level. The second cryptocurrency by market capitalization is following the general sentiment in the market and is seeing some respite after reducing the impact of macro forces for the time being.
At the time of writing, Ethereum (ETH) is trading at $1,330 with a gain of 9% in the last 24 hours and a loss of 2% over the past week. In the top ten list of cryptocurrencies, ETH is one of the best performing assets along with Solana (SOL) and Bitcoin (BTC).
Will Ethereum Bulls ever come out of the shorts?
Yesterday, the cryptocurrency market witnessed high volatility on the back of the report on the US Consumer Price Index (CPI), the benchmark for inflation in this country. The gauge printed 8.2% for September, beating expectations, pushing Bitcoin and Ethereum below critical support.
After taking liquidity to the downside, the market bounced back into the range that was cutting short and long positions. According to a pseudonymous trader, the volatility has not been able to liquidate sellers who are betting on further downward movement of the Ethereum price at its current levels.
These positions accumulate for several weeks, pushing the open interest (OI) of Ethereum futures to new highs. In the coming days, if the bulls can maintain the bullish momentum, then liquidating these positions could provide fuel for a rally to the $1700 area where ETH price stood before the “consolidation.” pseudonym dealer pointed the following:
Despite the current volatility and the huge amount of long liquidations, open interest is still very high. Obviously, there is still a whole bunch of shorts open. The fact that they didn’t cover much at all in the low range indicates greed. They should shut down for a while.
If the shorts are eliminated, how high can ETH go up?
As mentioned, the biggest cryptocurrencies are back in the range they’ve been in for over a month. Hence, the pseudonymous trader believes that Ethereum could break the local resistance around $1,300 and push towards the $1,400 region.
As seen in the chart below, yesterday’s bearish price action was violent but short-lived. Something similar can happen to the upside if short positions are liquidated.
Meanwhile, with the low volume weekend approaching, the cryptocurrency market could retest the lower levels before gathering momentum for a new rally. This could put Ethereum at the top of its channel, as shown in the chart below, at $1,400. Merchant alias added:
Given that the total CPI dump has been fully corrected on such a large scale, I am inclined to believe that we are now beginning our adventure again towards the top of the range. Area 1200 makes sense for a long time, and it doesn’t make sense to be short, at least in my head.