Ethereum Surges as Profit/Loss Ratio Peaks
The world’s second-largest cryptocurrency, Ethereum (ETH), is experiencing a significant surge in price, with the potential to surpass $3,300 in the short term. Currently, ETH is trading at $3,257, up 1.61%, with a market cap of $391 billion.
On-Chain Data Shows Highest Profit/Loss Ratio
Santiment, an on-chain data provider, reveals that Ethereum has achieved its highest profit/loss ratio in nearly three months. In fact, it has surpassed Bitcoin in terms of profitability. The Ethereum network has witnessed a notable proportion of profitable on-chain transfers this week, with a ratio of 2.3 to 1 for coins moving at a profit compared to those at a loss. Similarly, Bitcoin’s ratio stands relatively high at 1.8 to 1 during this period. This data suggests positive sentiment among cryptocurrency holders and highlights increased profitability for transactions on both the Ethereum and Bitcoin networks.
The upcoming Ethereum Dencun upgrade next month further supports the current rally in ETH price.
ETH Price Action Indicates Bullish Sentiment
An analysis of the ETH funding rate chart shows a significant decline on February 26, dropping to as low as 0.02%. However, with market sentiment turning bullish on Tuesday, LONG position holders quickly pushed the funding rate up to 0.06%, representing a staggering 300% increase from the previous day. This resurgence in confidence among Ethereum futures traders reflects their conviction to drive spot prices towards the next milestone, potentially surpassing $3,500.
IntoTheBlock’s global in/out of money data further supports this viewpoint. With Ethereum currently trading at $3,250, approximately 80% of current holders find themselves in a profitable position. This scenario may lead many holders to hold onto their ETH rather than sell, thus fueling the ongoing rally. However, it’s worth noting that the 1.03 million addresses that acquired 218,650 ETH at an average price of $3,300 could serve as a significant resistance level to overcome. If this resistance level is breached, it could pave the way for a rally above $3,500.
Nevertheless, if prices dip below $3,000, the prevalence of extreme leverage positions exposes ETH traders to significant losses, especially if a wave of margin calls triggers a LONG squeeze. Crypto analyst Michael van de Poppe also suggests the possibility of a 10-20% drop after the current run-up.
Giant move on Ethereum.
It’s been rallying from $2,150 to $3,220.
To be accurate, having a 10-20% correction after this run would be very normal to expect.
I’m still determining where, but if it happens, it’s a dip opportunity before Ethereum visits $4,000.pic.twitter.com/TTGyyQF1bl
— Michaël van de Poppe (@CryptoMichNL) February 27, 2024
Hot Take: Ethereum’s Surge Continues
The recent surge in Ethereum’s price and the highest profit/loss ratio in nearly three months indicate a strong bullish sentiment in the market. As an ETH holder, you have the potential to benefit from this rally, with prices eyeing gains past $3,300 in the short term. However, it’s essential to consider the possibility of a correction, which is normal after such a significant run-up. Keep an eye on the support levels and be prepared for a potential 10-20% drop. If prices dip below $3,000, extreme leverage positions may expose you to substantial losses. Stay informed and make strategic decisions to maximize your gains in this volatile market.
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