The second-largest token, Ethereum, faced the wrath of the market participants as the price continued to remain stuck within a narrow range. When Bitcoin price ranged high above $100K and bagged a new ATH above $109K, Ethereum price struggled hard to rise above $3500 since the start of the year. Now that the price has been constantly forming lower highs and lows, the question arises whether it is a time to sell ETH or a good time to stack more as the price is expected to take a flight beyond the current ATH.
In a recent update, the short positions of ETH have now risen over 40% in just a week and more than 500% since November 2024. The platform has never recorded such insanely short levels and hence it suggests that the hedge funds may know something that the retail traders don’t. Let’s break it down,
- Ethereum experienced the effects of extreme positioning in the first few days of February and dropped by 37% in a few hours as the trade war emerged, squashing more than $1 trillion.
- In December, ETH saw more than $2 billion of new funds with a record-breaking weekly inflow of more than $854 million. However, the hedge funds are betting on ETH’s surge and limiting breakouts
- The token witnessed a rise in the volume around Trump’s inauguration and after the latest crash at the start of the month. However, the price action has failed to recover the gap lower even as one week has passed
- Besides, in the times when Bitcoin and other cryptos have broken out, ETH price is stuck within a range
- Secondly, Ethereum was largely debated as a security, which is expected to be squashed under Trump’s administration
- Other potential reasons include market manipulation to harmless crypto hedges and a bearish outlook on Ethereum itself
So What’s Next? What to Expect from the Ethereum Price Rally?
The Ethereum price is still holding strongly to its uptrend support since 2023, which suggests the bulls are extremely vigilant over the price rally. The token experienced a significant influx of over $400 million in ETF inflows, which flashes major bullish signals. Meanwhile, some big updates are upcoming in the next month, which validates the bullish trajectory. On the other hand, Trump is reportedly buying and holding ETH and hence, once the price rises above $4000, the breakout could be insane.
The ETH price in the long term is training along the ascending trend line, which is acting as a strong support. However, the 50-day weekly MA at $3150 is the major price range that needs to be achieved and may further push the levels close to the upper milestones. However, the 200-day weekly MA is offering a strong base and hence a rebound appears imminent. Meanwhile, the RSI flashes some uncertainly, as it could be a bullish divergence or lower highs. Therefore, the weekly close may have a wider and clearer picture for the Ethereum (ETH) price which may decide if the token may rise above $3200 or remain consolidated below the range.
