Following a significant liquidation event in the Ethereum (ETH) futures market, CryptoQuant analyst Shayan believes that the cryptocurrency may be on the verge of a rally. The recent liquidation event, coupled with historical data, suggests that ETH could experience a price surge as spot buying pressure increases and the market stabilizes. Despite a recent dip in ETH price, with a loss of nearly 34% of its value, the cryptocurrency has shown resilience with significant buying activity near the $2,100 region, leading to a rebound to the $2,500 level.
Potential for Market Recovery
While ETH is currently trading at $2,623, down 2.3% in the past 24 hours, futures market data indicates the possibility of a more significant rally. The recent liquidation of long perpetual positions, reaching levels last seen in November 2022, suggests that the market is cooling and leveraged positions are being flushed out. This development, combined with rising spot buying pressure, could attract new buyers and stabilize the market, potentially leading to a recovery from the recent downturn.
Contrasting Viewpoints
Although Shayan’s analysis points towards a bullish reversal for ETH, daily and hourly charts may suggest otherwise. While there is strong bullish support near the critical $2,100 level and robust demand around $2,000, indicating investor confidence in ETH’s long-term potential, the cryptocurrency is currently facing resistance at the $2,800 threshold. This resistance level poses a challenge for ETH, especially as it includes the previously broken lower boundary of the wedge during the cryptocurrency’s recent plunge.
The recent liquidation event in the ETH futures market has stirred speculation about the potential for a market recovery and a price rally for the cryptocurrency. While historical data and market dynamics suggest the possibility of renewed interest in ETH and a bullish surge in the longer term, resistance levels and technical indicators may pose challenges for its price movement in the short term. Investors and traders will need to closely monitor market developments and trends to gauge the likelihood of an ETH rally based on futures market data.