Ether (ETH) has experienced a notable 13% drop below the crucial $3,000 level since early August, but recent onchain metrics suggest that the correction might soon be coming to an end. According to CryptoQuant author Burak Kesmeci, buyers are starting to regain strength in Ether, indicating a potential shift in market dynamics.
In a report published on August 19, Kesmeci highlighted two key onchain metrics that are showing signs of a potential recovery for Ether. The first metric is the taker buy-sell ratio, which tracks the ratio of buyers to sellers of Ether across major cryptocurrency exchanges. Kesmeci pointed out that this ratio has turned positive again, suggesting increased buying interest.
Additionally, CoinGlass data reveals a shift in market sentiment. While the longer 24-hour period shows a slight edge for short-sellers, the more recent 12-hour period has turned positive, with 50.37% of positions being long. This shift indicates a growing confidence among traders in a potential price rebound.
Another important metric is Ether’s open interest (OI), which represents the total number of outstanding options contracts held by traders. As of August 19, Ether’s OI stands at $10.69 billion, marking a 10% increase from the previous day. This uptick in OI suggests that leveraged players are becoming more confident, a positive sign for potential upward price movement.
Kesmeci noted that significant upward price movement typically requires the return of leveraged traders. The historical data supports this view: when Ether reached its year-to-date all-time high of $4,066 on March 12, OI was $13.67 billion. During a subsequent retest of those levels in June at $3,800, OI surged above $15 billion, indicating a market correction was imminent.
Kesmeci also pointed to the introduction of US ETH ETFs as a potential factor behind Ether’s recent price decline. Since their launch 28 days ago, these ETFs have recorded a cumulative net outflow of $434 million, contributing to additional selling pressure. This mirrors a similar trend observed with Bitcoin ETFs, where Bitcoin’s price fell by about 15% during the first 28 days after their launch before recovering.
As of the latest data, Ether is trading at $2,679, down 23.57% since July 23. Despite this decline, the positive signs in onchain metrics and open interest suggest that the downward trend may be nearing its end. Investors and traders will be watching closely to see if the recent shifts in market dynamics translate into a price recovery for Ether.
In summary, while Ether has faced significant price challenges recently, the emerging positive trends in onchain metrics and open interest offer hope for a potential rebound. As market conditions evolve, these indicators could play a crucial role in determining the future direction of Ether’s price.
August 2024, Cryptoniteuae