In a bullish trading week, Ethereum (ETH) surged more than 8% as the market price returned above the $2,600 price mark. However, amidst this rally, certain market developments occurred that cast doubt on Ethereum's future price trend.
50,000 ETH flows into derivatives exchanges – will prices rise or fall?
In a Quicktake post on CryptoQuant, an analyst with the username Amr Taha reported that the derivatives exchange had positive net inflows of over 50,000 ETH worth $132.12 million. In this context, netflow measures the difference between the amount of ETH deposited and the amount of ETH withdrawn from derivatives exchanges, which are standard trading platforms for products such as options and futures contracts.
Therefore, the net flow indicates that more ETH was deposited than withdrawn on the last day. Analyzing the impact of this development on Ethereum price, Amr Taha envisioned two situations.
First, analysts believe that positive net flows to derivatives exchanges could be due to traders looking to offload ETH by opening short positions or selling through futures contracts at predetermined prices. , said it could indicate a potential increase in selling pressure. Alternatively, positive net flows could indicate that traders are betting on the ETH price to rise and are depositing ETH to use as margin or collateral for future contracts, thus indicating confidence in the token's profitability. Possibly.
Essentially, this large positive ETH netflow has a huge potential to cause the price of Ethereum to move in either direction based on trader actions.
Ethereum prepares for encounter with significant resistance
In other news, Ethereum continues to trade at $2,636, reflecting gains of 1.11% and 12.89% over the past 1-day and 30-day period, respectively. Meanwhile, the daily trading volume of the token increased by 12.89% and its value reached $17.06 billion.
However, despite these positive indicators, data from CoinMarketCap shows that market sentiment towards altcoins remains largely unchanged as investors likely expect a price retracement following ETH's recent rally over the past week. It shows that it is bearish. Interestingly, Ethereum’s daily chart shows the token approaching $2,700, a key resistance level that has served as a strong rejection zone for the past two months.
That said, the relative strength index is still a fair distance away from the overbought zone, indicating that Ethereum’s price rally may be far from over and a breakout of this resistance level is possible. Additionally, analysts are observing an ascending triangle pattern on the ETH hourly chart, indicating strong bullish potential for a surge above $2,700 and a peak of $2,870 in the coming days.
