Ethereum faces sudden strong buying activity, market responds
Ethereum traders have bought more than 16,000 ETH in the last 60 minutes, according to IntoTheBlock data provided on Twitter.
A sudden spike in purchasing activity
As the data suggests, traders and investors have bought 15,500 ETH in the last 30 minutes. The sudden spike in buying activity drove prices up by almost 4%.
The spike in buying activity was a long-awaited event for the market that has remained in a deep correction state since the end of December last year. Major altcoins and Bitcoin have lost approximately 15% of their value in the first days of the new year.
Ethereum had lost 30% of its previously acquired value, with its ATH remaining at $ 4,872. Ether failed to break through the $ 5,000 resistance that most traders refer to as the “diamond cap”.
Ethereum being technically oversold
As numerous technical indicators have previously suggested, Ethereum has been strongly oversold on the market, with such widely known indicators as the Relative Strenght Index reaching two-year lows.
The technical oversaturation of the market with short sales and orders usually results in a sharp rise in the price of the asset as long as even low purchasing power appears in the market. The surge in prices of assets like Ethereum that remain in a corrective state is linked to the short squeeze, which was the basis of the most recent 5% rally in ETH.
U.Today covered the main reason behind the cryptocurrency market drop that has mostly affected larger capitalization coins and tokens. With the key interest rate hike, more traders have decided to leave risk-on assets like cryptocurrencies and lean toward safer options.
