Ethereum Is on the Move. Here Are Three Signs That a Bullish Breakout Could Be Imminent
Journalist
- Ethereum has shown signs of investor accumulation over the past three weeks.
- ETH could see even more gains as disbelief turns to FOMO.
Ethereum [ETH] Peter Brandt called it “junk coins” with “outrageous gas fees.” Although the token was heavily criticized, some investors were still optimistic.
It was noted that there was a 6.5% rally at this time on April 8. The gains were made despite a chart pattern that predicted a drop to $2800. Are most participants doubting the current rally or is it a temporary correction before the next downside move?
US traders are shocked
The Coinbase Premium Index is the difference between Binance and Coinbase prices in percent. Coinbase is the best index to measure the enthusiasm of US participants since Binance is not available to US residents.
The Coinbase premium fell to zero between April 2 and April 7. However, ETH was still recovering from recent losses. Coinbase’s premium quickly increased as it rallied at the end of the month.
How about ETH at $4,000?
Exchange reserves for Ethereum started to decline to $3,056 after the drop on March 19. This was an indication that users were moving their tokens from centralized exchanges. This implied an accumulation of tokens and a decrease in selling pressure.
The downtrend still holds, although the reserve currency saw a slight increase on April 7. The short-term resistance of $3,400 was reclaimed by some investors, giving them a reason to take profits.
A sustained downtrend in the reserves metric is excellent news for bulls in the long term.
Looking at the short-term liquidations, it was clear that there were a lot of short-term liquidations in the past two days. CryptoQuant data showed that it was just over 17,000 Ethereum. Once these liquidations are triggered, they would open market buy orders, which would drive prices higher.
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If the rally continues, Ethereum price would likely blow away the bears.
Their forced capitulation is rocket fuel for future gains. This week, we could witness a new short squeeze at $4,000 ETH, and disbelief could quickly turn into FOMO.
