Recent analyses indicate that Ethereum has faced difficulties, lagging behind other significant cryptocurrencies. Nevertheless, there are emerging positive indicators for its future.
As per CryptoQuant analyst Percival, Ethereum’s open interest has surged markedly, reflecting an increase in investor optimism regarding a potential price rally.
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Possibility of Ethereum Rally and Long Position Advantages
Data shared by Percival reveals that Ethereum’s open interest has reached $9.6 billion, representing a 28.57% rise since August, although it remains below the $13 billion noted in June.
This uptick in open interest signals expectations for a price increase, as traders position themselves for anticipated demand.
Percival pointed out that various factors, such as possible interest rate cuts by the Federal Reserve and a heightened interest in the future of tokenization on Ethereum’s blockchain, could contribute to this growth.
Such a change may attract more attention to decentralized finance (DeFi) initiatives, thereby making Ethereum more appealing for investors seeking steady long-term profits.
Percival emphasized that Ethereum’s Relative Strength Index (RSI) is currently at 61, indicating that the market may be overheated.
A “convergence” of open interest and RSI levels suggests that any price corrections may be brief, providing traders with opportunities to position for a market rebound.
The analyst estimates that Ethereum could undergo a correction of around 7% to 9% before making another upward move, favoring long positions as traders anticipate a rise in price and demand.
Percival specifically stated in a post on the CryptoQuant QuickTake platform:
The convergence of the highest lows in the RSI indicates a potential for a less significant correction, estimated between 7% and 9%. This situation favors long positions, as traders await a market rebound to establish new highs and higher lows.
ETH’s Path Towards a Bullish Breakout
As of now, Ethereum is priced at $2,611, down slightly by 0.1% within the last 24 hours. This follows a strong week for the cryptocurrency, which recorded a 9.3% increase, while also appreciating nearly 15% over the past month.
Another notable crypto analyst, Ali, suggests that Ethereum may be on the brink of a substantial rally. In a recent post on X, Ali revealed that Ethereum has recently reached the lower boundary of a channel, a level that historically has prompted an average price surge of 130%.
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Ali further stated that if this trend persists, Ethereum could potentially rise to $6,000, provided it maintains its critical support level of $2,300.
Every bounce off this channel’s lower boundary has historically resulted in an average 130% price increase for #Ethereum.
If this pattern persists, a similar move could see $ETH reaching $6,000—assuming the key support of $2,300 holds strong. pic.twitter.com/CFpLrQWEih
— Ali (@ali_charts) October 14, 2024
Thus far, despite the volatility in the ETH market, the asset has succeeded in staying above the crucial $2,300 support level, supporting the notion that a bullish breakout may be forthcoming.
Featured image created with DALL-E, Chart from TradingView
