During the past week alone, the price of Ethereum witnessed a jump from the $ 2,900 level to $ 3,300. In fact, the price of the larger alternative has inflated 5% in the last 24 hours alone. Interestingly, the Ethereum domain’s market cap stood at close to 20% at the time of writing. The alt was able to assert a dominance of such magnitude only in February 2018 prior to this.
However, many questions remain unanswered at this time. For starters, how fast would the ETH price move towards new local highs? Is the $ 3,600 benchmark implausible right now? Is it time for a short or long ETH?
Temperature control – derivatives market
Open interest, as of this writing, was at its highest level in a month ($ 8.4 billion). A growing open interest is indicative of an additional flow of money in the market. As such, OI levels are also used to measure the strength of an ongoing trend. By looking at current levels, it can be stated that the ongoing uptrend is gaining momentum and is likely to continue to advance. Therefore, at this stage, it can be inferred that market participants have faith that the price of ETH would increase in the coming days.
In fact, the number of long contracts being settled has been declining lately. At the time of writing this article, their value stood at $ 6.06 million. Short liquidations, on the other hand, have been on the rise and reflect a value of $ 52.2 million at press time. This basically implies that the current ETH environment is more favorable for long traders than short traders.
What do the proportions indicate?
From mid-May to late July, Ethereum’s SOPR spent more time on the downside (below level 1). However, the same has been creeping north since the beginning of August. In fact, at the time of writing this report, this indicator reflected a value of 1,096. SOPR values greater than 1 generally imply that the moved coins are being sold at a profit. The MVRV ratio also, for that matter, reached its 1-month high of 2,608 at the time of writing. Again, this indicates that investors are earning more than usual from the market.
An increasing price, most of the time, acts as an incentive and forces both investors and long-term traders to extend the duration of their stay in the market. If the same happens, chances are ETH can sustain its price rally.
State of the spot market
However, the spot market figures paint a slightly grim picture. The number of active addresses sending ETH to exchanges just hit its month-long high of 725,024. Now while this indicates that people are moving away from their HODLings, it should be noted that current levels are comparatively low on the macro level. However, the current trend must be reversed to protect the short-term outlook for ETH.
Also, since August 8, spot volumes have not been able to keep up. In less than a week, the same thing has shrunk from 33 billion to 23 billion.
The next few days can be tricky for Ethereum, but looking at the current state of relationships and the derivatives market, it can be concluded that the $ 3600 level will likely be broken in the next few days.
This is a machine translation of our English version.
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