Ethereum: Despite bleak price action in ETH, here’s what derivatives data has to say

ETH

Ethereum’s progress seems to have absolutely stalled as the king of altcoins has failed to recuperate its losses from the first quarter of the year.

At around $3,000, ETH was doing even better until the end of April, just after which the altcoin lost extremely crucial support that could have helped it rebound towards $3,200.

This level is the 23.6% Fibonacci level which coincides at $2,815, which ETH was testing 48 hours ago but failed to close above it. The 8.4% decline that followed left the price trading at $2,686 as of press time.

But from now on, the important question is,

Can Ethereum jump to $4-5,000 by June 24?

The reason this matters is that this date holds the largest expiry in the second quarter, with over 618,300 open contracts aiming for cash profit. Now most of the open contracts that expire that day are primed for a rally.

About 67% or 420k contracts are bullish bets using calls, and the Open Interest by Strike indicates that there is a high demand for the price to reach either $4k or $5k.

Even if 140,000 contracts are also asking for $10,000, the likelihood of that happening is quite low. However, ETH still has a chance to hit $4,000 or $5,000, provided there is market support.

Firstly for Ethereum to reach $4k from its current trading price, the altcoin will have to rise by 49.19%, and for the same to happen for $5k, ETH needs to mark a 86% rally in the next 48 days.

Now the reason either is possible is because the same thing has happened before.

Back in August 2021, ETH registered a 121% increase in the span of 46 days, followed by another similar rally of 73.91% in October.

Provided that at the time the market is in a bullish state, Ethereum may not be too far from recovery as price indicators show the possibility of a trend reversal with bulls supporting in the next few days, which, at least set Ethereum to close above the 23.6% Fib line.

But if the momentum fails to pick up strength, then 420k contracts can incur major losses.

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