Why Ethereum Could Reach $2500
The recent volatility in the crypto market has taken a bullish turn, with optimism surrounding the nearing deadline of the U.S. Securities and Exchange Commission’s (SEC) decision on the Bitcoin ETF. As a result, Ethereum (ETH), the second largest cryptocurrency, has been rising for the past three days and reclaiming support from the channel pattern and 20-day EMAs. This counterattack could potentially push the price of Ether to $2500.
Support from Channel Pattern
- The reentry of ETH into the channel pattern provides additional support for buyers.
- A healthy retracement in ETH price suggests a strong bounce is likely.
- The intraday trading volume in Ether is $16.4 Billion, indicating a 22% gain.
In the past ten weeks, Ethereum’s recovery can be traced using a rising channel pattern. The lower trendline of this pattern has provided strong pullback support to buyers, helping to sustain the recovery trendline.
However, during the third week of sell-off in the crypto market, ETH price broke below the lower support of the pattern. This breakdown was expected to trigger a correction with increased selling pressure.
Despite this breakdown, buyers made a counterattack with higher volume and reentered the channel pattern. With a 4.5% intraday gain, the ETH price is now trading at $2341, marking the previous breakdown as a bear trap.
Traders with tight stop loss orders may face forced liquidation, leading to additional buying orders. If the price can sustain above the reclaimed support, buyers may drive a 10% rally to revisit the upper trendline near $2500.
Funding Rates Surge Signals Confidence
The recent upward trend in Ethereum has been accompanied by a significant increase in Ethereum Funding Rates, indicating widespread expectations among traders for further gains and a target of $2500. Data from Coinglass shows that the ETH Funding Rates surged to 0.045% last Friday. This surge in funding rates suggests that traders are leaning bullish and willing to pay a premium to hold long positions. This positive sentiment can create a self-reinforcing effect as higher funding rates attract more traders expecting the price to climb.
- Bollinger Band: The narrow range in the Bollinger Band indicator reflects increasing volatility in the market.
- Average Directional Index: The daily ADX slope at 24% indicates that buyers have enough momentum for a further rally.
Hot Take: Ethereum’s Bullish Momentum
Ethereum has shown strong bullish momentum in recent days, with the price reclaiming support levels and the potential for a rally to $2500. The reentry into the channel pattern and the surge in funding rates indicate growing optimism among traders. With increasing volatility and buyers showing strength, Ethereum is positioned for further gains in the near future.
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