The price of Ethereum (ETH) is poised for a considerable recovery after experiencing a nearly 9% decline in the past week. As the altcoin gains traction for a possible uptick, those holding short positions, who anticipate further declines in ETH’s price, may encounter mounting pressure.
This analysis by BeInCrypto explores the elements that could propel Ethereum’s value upward. It also discusses the potential effects on traders aiming to capitalize on the cryptocurrency’s price fluctuations.
Ethereum’s Comeback Target: Shorts Face Rising Pressure
With October being dubbed “Uptober,” a label for a bullish month, several analysts predicted that ETH might hit $3,000. However, a lackluster start to the month saw Ethereum’s price plummet from $2,600 to $2,360, leading to significant liquidations of long positions.
Nonetheless, recent analysis indicates that the momentum could shift, putting shorts at a disadvantage. One crucial indicator for this potential turnaround is Ethereum’s Coin Holding Time, which calculates the duration coins have been held without being sold or transacted.
A shortening of the holding time typically signifies that more holders are liquidating their assets, which generally reflects bearish sentiment. Such activity usually precedes downward price pressure, suggesting a diminishing confidence in maintaining the coin.
Read more: A Comprehensive Guide on How to Purchase Ethereum (ETH)
Interestingly, Coin Holding Time has actually increased by 58% during Ethereum’s recent price dip, which is a positive sign for ETH. This trend suggests that long-term holders are either accumulating more or holding steady despite the price decline.
This behavior could be pivotal in aiding the cryptocurrency’s recovery and possibly reversing some of its recent setbacks. If this trend persists, ETH’s price could rise toward $2,600. Data from Coinglass indicates that a rise to $2,644 might trigger over $700 million in short liquidations.
If this scenario plays out, it could lead to a short squeeze. For those unfamiliar, a short squeeze occurs when a cryptocurrency’s price rises sharply, forcing traders who bet on a decline to cover their positions.
ETH Price Forecast: A Potential Bull Market Ahead
Despite the decline, bullish sentiment seems to be supporting the price as the swing lows are still forming an ascending trend line. As long as this trend remains intact, a swift rebound and continuation of ETH’s upward trajectory may be imminent.
It’s crucial to highlight that robust buying pressure is essential for this prediction to materialize. Analyzing the daily chart below, if the uptrend line holds, Ethereum’s price could potentially climb to $2,450.
If buying pressure escalates, the altcoin’s value could also reach $2,690. In that scenario, Ethereum could avoid exiting the bull market, paving the way for a price increase toward $3,202.
Read more: Ethereum (ETH) Price Forecast for 2024/2025/2030
Conversely, a drop below the trendline could nullify this prediction. In such a case, ETH’s price might fall below the $2,300 mark to around $2,295.
Disclaimer
In accordance with Trust Project guidelines, this price analysis is intended for informational purposes only and should not be interpreted as financial or investment advice. BeInCrypto strives for precise, impartial reporting, but market conditions can change without warning. Always perform your own research and consult a professional prior to making any financial choices. Please be aware that our Terms and Conditions, Privacy Policy, and Disclaimers have undergone updates.
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