Ethereum RSI & Open Interest Surge: Is $3,000 Within Reach?

Ethereum has achieved an eight-week peak as the RSI indicates a surge in buying momentum.
With open interest at $14 billion, there is a noticeable increase in market activity among derivative traders.

Ethereum [ETH] was trading at an eight-week high of $2,735 at the time of this report, following a nearly 4% rise in 24 hours. Data from CoinMarketCap reveals that trading volumes have surged by over 100%, indicating growing market interest.

This increase led to ETH recording the highest level of short liquidations in the crypto sector. At the time of this report, over $23 million in ETH short positions had been liquidated according to Coinglass.

Such a high level of short liquidations is typically a bullish indicator, suggesting that short sellers are converting to buyers to close their positions. An analysis of Ethereum’s one-day chart indicates that these optimistic trends may persist.

Ethereum displays bullish indicators

ETH has reversed the 100-day Exponential Moving Average (EMA) at $2,685, reinforcing the upward momentum. However, this trend later encountered resistance as ETH approached the 200-day EMA.

The 200-day EMA, situated at approximately $2,800, is a critical psychological benchmark for traders. A definitive breakout above this resistance could catapult the altcoin into a long-term bullish trend, potentially propelling it towards the 1.618 Fibonacci level above $3,000.

Source: Tradingview

Technical indicators suggest that a breach above the 200-day EMA is probable. The Chaikin Money Flow (CMF) has turned positive for the first time in nearly two weeks, indicating increased capital inflow into ETH.

Moreover, the Relative Strength Index (RSI) has reached new highs, achieving its highest point since June, displaying strong buying pressure.

Source: Tradingview

Despite the surge of buyers, Ethereum’s RSI sitting at 66 indicates it is not yet overbought. This suggests there is still potential for growth.

Spike in open interest and leverage ratio

Ethereum’s open interest has climbed to its highest point since August, according to Coinglass data. At present, this figure stands at $14 billion, signaling substantial market participation and capital inflow into ETH.

Source: Coinglass

An increase in open interest is generally a bullish indicator if traders are opening long positions, but it can also lead to price fluctuations.

Ethereum’s estimated leverage ratio is nearing a three-month high, indicating an influx of borrowed funds. If ETH experiences sudden price movements, it may trigger a significant number of forced liquidations, resulting in increased volatility.

Source: CryptoQuant

Profitable Ethereum wallets

Due to Ethereum’s recent price hikes, there has been a notable increase in wallets that are currently in profit. As of this report, 69% of all ETH addresses are in profit, marking a 6% rise over the past week.