Ethereum (ETH) has recently seen a significant drop in selling pressure, signaling a possible market recovery. Here are the four main reasons identified for this trend, and what it could mean for the future of Ethereum crypto.
Crypto: Four reasons for Ethereum's imminent rise?
Crypto Ethereum saw a notable drop in selling pressure, heralding a possible ETH explosion. According to a recent analysis, here are the four key reasons behind this trend.
- Positive financing rate
Ethereum's funding rate was 0.01, indicating a healthy market where long positions support the spot market. A positive funding rate means that crypto traders are willing to pay to maintain their long positions, which is a sign of confidence in future price rises.
- Favorable buyer-seller ratio
Ethereum's long-ask ratio was 0.57, showing that buying sentiment dominated the derivatives market. When buyers are active, it creates increased buying pressure, essential for driving prices up through demand. This favorable ratio is a key indicator of crypto investors’ confidence in rising prices. ETH price.
- Increase in open interest
Open interest for ethereum rose 3.18% in 24 hours, signaling a slight heating up in the derivatives market, albeit short-lived. An increase in open interest indicates that new contracts are being created, which may be a sign of new investors entering the crypto market, ready to bet on rising prices.
- Liquidation of short positions
A considerable amount of short positions were liquidated, with $6 million in liquidations over the past day. Liquidation of short positions reduces selling pressure in derivatives markets, thereby negating the impact of increased open interest. This means that short sellers, who bet on prices falling, are forced to repurchase their positions, which can cause crypto prices to rise.
Future prospects
Although ethereum's performance in derivatives markets offers a promising outlook, it is essential to check what the spot market is saying. The supply-to-exchange ratio has declined over the past week, suggesting that crypto investors are keeping their assets off exchanges, reflecting accumulation in anticipation of better prices. Additionally, net flow from large holders remained positive, indicating continued confidence from major investors.
In sum, decreasing selling pressure on Ethereum, combined with positive market indicators, could signal a potential recovery. However, it is crucial to monitor future developments to confirm this crypto trend.
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