As a seasoned crypto investor with a decade of navigating market highs and lows under my belt, I must admit that the recent dip in Ethereum prices has tested my patience but not shaken my faith. The taker-buy ratio turning positive again and the increased bullish sentiment as indicated by CoinGlass data are certainly encouraging signs that this correction may be nearing its end.
As of August 19, 2024, Ethereum (ETH) prices have plunged significantly, reaching $2,664. This represents a drop of approximately 21.30% since late July, based on data from CoinMarketCap. Despite this downturn, some financial analysts posit that this correction could be nearing its end, as certain critical blockchain indicators point towards an upcoming rebound.
According to analyst Burak Kesmeci from CryptoQuant, Ether’s taker-buy ratio is showing signs of being positive once more, hinting that buyer power is reemerging. This ratio represents the overall balance between buyers and sellers on significant cryptocurrency exchanges, and a positive value indicates increasing buying demand.
It’s worth noting that data from CoinGlass shows a pattern that is quite comparable. In the past 24 hours, short-sellers had a slight advantage, but in the latest 12-hour period, there were a total of $49.84 million in liquidations. This includes $6.91 million from long positions being closed and $42.94 million from short positions being closed. This trend suggests that there’s been an increase in optimistic sentiment among traders.
Ethereum Correction May Be Nearing Its End
As a researcher, I observed an impressive surge of 10% in Open Interest (OI) for Ethereum futures on August 19, pushing the total to a staggering $10.69 billion. This substantial increase indicates heightened trader activity, a trend that Kesmeci posits could lead to significant upward price movements if market participants with leveraged positions decide to re-enter the market.
Historically, surges in Ether’s Open Interest (OI) have often indicated significant market transitions. For instance, in March 2024, as Ether reached its yearly high of $4,066, the Open Interest skyrocketed to approximately $13.67 billion. A comparable surge above $15 billion was witnessed when Ether tested the $3,800 level again in June, just prior to a steep market correction.
Kesmeci emphasizes that these patterns indicate we could be nearing the end of the current downturn. He stated:
“This indicated a market correction was likely, and indeed, the correction occurred.”
ETF Launch Fails to Lift Ether, Adds to Pressure
The debut of the initial exchange-traded funds (ETFs) based on Ether took place on July 23rd, sparking much excitement, yet the price fluctuations have fallen short of expectations. In the last 28 days, Ethereum ETFs operating in the U.S. have experienced a withdrawal of approximately $434 million, which has intensified selling pressure. The current scenario mirrors what occurred with Bitcoin ETFs, where there was a decline of around 15% after their launch, followed by a subsequent recovery.
With Ether dipping below $2,600, some worries have arisen, but a mix of improving on-chain statistics and renewed trader assurance hints that this downtrend might be nearing its end. The attention is now on whether leveraged traders will reappear, which could signal a revival.
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2024-08-20 13:56