Ethereum Bulls Get Aggressive As Traders Set Sights on $4,000

Ethereum has been exhibiting a strong and sustained upward development, displaying its mettle within the unstable cryptocurrency market. At the time of writing, the value of ETH was hovering round $3,743, surpassing its shifting averages with appreciable bullish momentum.

The cryptocurrency group is now eagerly anticipating the breach of the numerous $3,500 value threshold, marking a possible milestone for Ethereum’s continued ascent to the highly-coveted $4,000 price ticket.

Notably, the present value has surged nicely above the 50-day shifting common, which stands at roughly $2,700, underscoring the energy of the continuing bullish development. Furthermore, the 100-day shifting common, located at $2,400, serves as one other essential assist stage. Historically, these key helps have confirmed instrumental in propelling Ethereum costs larger upon retesting.

ETH Surge: Price Correction In The Offing?

Ethereum (ETH) surged alongside Bitcoin (BTC) on February twenty eighth, reaching inside spitting distance of its all-time excessive of $3,500. While bulls rejoice, a technical indicator hints at a possible pause within the rally.

The CryptoQuant Funding Rates metric, reflecting charges paid in perpetual futures contracts, reveals a significant spike for ETH on February twenty eighth. Reaching 0.07%, it marks the best stage since April 2021, exceeding the 0.06% peak noticed earlier than ETH’s earlier peak of $4,800 in November 2021. Historically, such surges in funding charges have typically preceded value corrections.

Source: CryptoQuant

The excessive CryptoQuant Funding Rates not solely recommend a possible pause within the rally but in addition elevate considerations concerning the sustainability of the present momentum. Typically, such dramatic surges point out extreme bullish sentiment and overheated markets fueled by extremely leveraged lengthy positions.

Crypto market cap now stands at $2.27 trillion. Chart: TradingView.com

There are two the explanation why this state of affairs is extraordinarily complicated. First off, within the occasion that costs flip round, it exposes bulls to vital losses. Second, it raises the opportunity of an extended squeeze, an unusual scenario by which sturdy short-term promoting pushes holders of lengthy positions to liquidate, thus quickening the value lower.

ETH up 16% within the weekly chart. Source: Coingecko

Imagine a domino impact: leveraged lengthy positions get known as upon margin calls, forcing liquidation, which triggers additional promoting, pushing costs down additional, and inflicting extra margin calls. This cascading impact can result in panic promoting and vital losses for overly optimistic traders.

Although there is no such thing as a assurance {that a} extended squeeze will happen, the elevated funding charges function a harsh reminder of the inherent dangers which might be related to chasing a extremely stretched rally.

💤 A dormant pre-mine tackle containing 72 #ETH (243,771 USD) has simply been activated after 8.6 years!https://t.co/K8769uQJ0w

— Whale Alert (@whale_alert) February 28, 2024

Old Ethereum Whales Reappear, Sparking Crypto Speculation

In one other growth, a pre-mine Ethereum pockets that had remained inactive for nearly 9 years has been reopened, in accordance with information launched by the cryptocurrency tracker Whale Alert. It has 72 ETH valued at $243,771 in it.

This monitoring platform found that these 72 ETH funds had been moved to a different nameless cryptocurrency pockets. In addition to this pockets, in accordance with current sources, plenty of dormant Ethereum whales awoke in February and held premined Ethereum price 100 ETH, 429 ETH, 3,465 ETH (valued at roughly $10.4 million), and 100 ETH. They had all been dormant for about 9 years.

Featured picture from Pixabay, chart from TradingView

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