Ethereum's price is rising: is this the new Bitcoin?
Ethereum prices are rising along with Bitcoin and other cryptocurrencies.
It seems that Ethereum is following the general sentiment in the market, as Bitcoin and other cryptocurrencies make a run towards previous highs. The second cryptocurrency by market cap knocked some gains over today's trading session, but seems poised for a re-test of its lows before moving to the upside. This could be a good opportunity for investors to get in on the action before Ethereum starts moving upwards again.
While Ethereum (ETH) has seen some growth in the past 24 hours and week, compared to other cryptocurrencies it is lagging behind. This is different from previous rallies where ETH has been leading the pack. Bitcoin, the number one cryptocurrency, is up 4% in the same period.
Ethereum at critical point: will it finally breakout?
Today's bullish price action in the cryptocurrency markets is being driven by a rebound in legacy financial markets. The S&P 500 and Nasdaq 100 are both trading in positive territory, providing an opportunity for cryptocurrencies to rally. This change in sentiment is leading to increased optimism among investors in the digital asset class.
There is a growing sense of unease among market participants, as traditional markets are closed over the weekend. According to a pseudonym trader, Ethereum saw a spike in Open Interest (OI) against the U.S. dollars, indicating that a potential leg down is being priced in. This is a worrying development, as it suggests that traders are increasingly expecting prices to fall in the near future.
The recent increase in OI recorded as the cryptocurrency trended to the downside is likely due to a spike in short (sell) positions from traders expecting further downside in the short term, according to one analyst. This suggests that the market may be bearish in the near future.
The liquidity provided by these short positions is fueling further bullish momentum in the market. However, the analyst believes that the market might take this upside liquidity before re-testing support levels.
I said yesterday that there was a lot of short build up on $ETH. They’re getting squeezed now. Once that’s done it gets slapped back down I think. Looks like a clean short set-up.
It is clear that there is a strong potential for Ethereum to resume its bullish momentum or enter into accumulation mode. The data from Material Indicators shows that the area between $1,280 and $1,250 has the biggest concentration of bid (buy) liquidity on low timeframes. This suggests that there is significant support for Ethereum at these levels. As such, downside may be limited and the bulls may be able to take control once again.
