Ethereum Eyes $4,000 Comeback Fueled By Bullish Buying Spree
May 24 2024 - 8:30AM
NEWSBTC
Ethereum (ETH), the world’s second-largest cryptocurrency, has been
on a tear lately. After months of hovering, the coin has seen a
surge in price, and analysts are now pointing to signs within the
derivatives market suggesting this rally might have legs. Related
Reading: Next Big Move For Bitcoin: Analysts Predict A Potential
Breakout At $71,500 Taker Buy Sell Ratio Nears Equilibrium One key
indicator is the Taker Buy Sell Ratio, a metric that tracks the
volume of buy orders compared to sell orders in ETH’s perpetual
futures market. Traditionally, a ratio below 1 suggests more sell
orders are flooding the market, potentially driving the price down.
Conversely, a ratio above 1 indicates a dominance of buy orders,
often a bullish signal. SEC Okays Spot Ethereum ETFs, Market
Expectations Reversed The news that the US SEC has approved spot
Ethereum ETFs has caused a sharp reversal in the market’s
expectations for Ethereum ETF rejection this week, and as a result,
the price of Ethereum (ETH) is moving erratically in late Thursday
activity. As of right now, Ethereum was trading for about $3,770.
That is both considerably higher than the previous session low of
$3,500 and sharply lower than the previous session highs of over
$4,000. BOOM!! APPROVED! There it is. The SEC just approved spot
#Ethereum ETFs. What a turn of events. It’s really happening. h/t
@PhoenixTrades_ pic.twitter.com/KQ39mDyCbT — James Seyffart
(@JSeyff) May 23, 2024 CryptoQuant, a leading crypto analytics
platform, recently reported that ETH’s Taker Buy Sell Ratio,
observed using a 7-day simple moving average, is poised to cross
above its 1-center line. This signifies a decline in sell orders
and a potential rise in buying pressure. This suggests that the
coin may soon retake the $4,000 price level. Related Reading: Tiny
Pepe, Big Dreams: Memecoin Explodes, Eyes Dominance In The Dog
House This upward trend in the Taker Buy Sell Ratio indicates a
potential shift in market dynamics, noted ShayanBTC, a pseudonymous
analyst at CryptoQuant. If the ratio continues to rise, it may
signal a reduction in aggressive selling pressure, which could be a
positive development for ETH’s price, ShayanBTC added. Futures Open
Interest Reaches New Highs Another data point bolstering the
bullish case comes from the Futures Open Interest metric. This
metric tracks the total amount of outstanding futures contracts
that haven’t been closed or settled. A rising Open Interest
suggests more traders are entering new positions, potentially
anticipating a price increase. Related Reading: XRP Declares War On
Uncertainty: Analyst Predicts Breakout Fueled By Regulation
According to Coinglass, another crypto analytics platform, ETH’s
Futures Open Interest has skyrocketed to a new all-time high of $16
billion. This signifies a surge in market participation, with more
traders betting on ETH’s future. The all-time high OI suggests a
significant increase in investor confidence. This could be due to
several factors, including growing institutional adoption of ETH
and the upcoming Ethereum 2.0 upgrade. Featured image from
Explorersweb, chart from TradingView
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