In the past week, Ethereum (ETH) experienced a significant downturn, with its price plummeting to $2,112 on August 5th. This crash marked one of the largest market slumps of the year. However, the digital asset has shown signs of recovery, bouncing back by 8% in the last seven days. Ethereum has managed to reclaim the crucial $2,600 level and is now setting its sights on the $3,000 milestone once again.
According to a recent report by market analytics firm CryptoQuant, there was a substantial liquidation of long perpetual positions on the futures market during last week’s crash. In sustained bull markets, such significant liquidation events are often followed by major price rallies as the futures market stabilizes and spot buying pressure increases. The recent cascade of long liquidations, reaching levels not seen since November 2022, indicates a cooling of the futures market and the potential for renewed interest in futures trading.
Crypto analyst Caleb Franzen shared a similar prediction for ETH’s price performance on social media. Franzen suggested that if Ethereum can surpass the $2,725 level, it could signal a strong move higher. His analysis of the 4-hour candles and market structure points to a series of higher lows and a bullish reading on the supertrend indicators, adding to the optimism surrounding Ethereum’s future performance. Despite currently trading at $2,645, Ethereum faces its first resistance at the $2,700 level on the ETH/USDT weekly chart.
With the futures market potentially resetting and demand returning, Ethereum could be poised for another impulsive bullish surge in the longer term. This surge could potentially push prices above previous all-time high levels. The market stabilization and the cooling of leveraged positions in the futures market set the stage for renewed interest and potential future gains for Ethereum. As such, the $3,000 milestone remains a crucial target for investors and traders alike.
Overall, the recent price recovery and potential bullish trend for Ethereum showcase the resilience and market strength of this second-largest cryptocurrency. Despite facing resistance levels, the positive market sentiment and analyst predictions hint at a bright future for Ethereum in the crypto space.
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