Futures Market Data Suggests Ethereum (ETH) Could Rebound Soon: CryptoQuant

A CryptoQuant analyst says Ether (ETH) could soon see a rally, as metrics from the cryptocurrency futures market show.

According to a post by analyst Shayan, ETH has just witnessed a significant liquidation event, and historically, such events are often followed by price rallies when markets stabilize and spot buying pressure dominates.

ETH Could Rebound Soon

Earlier this month, the price of ETH took a downward trajectory, causing the crypto asset to lose nearly 34% of its value. According to data from CoinGecko, ether fell from $3,329 to $2,197.

The drop sparked speculation among investors that the cryptocurrency would fall further. However, significant buying activity near the $2,100 area caused the asset to bounce slightly back to the $2,500 level, where it is hovering. At the time of writing, ETH was trading at $2,623, down 2.3% in the past 24 hours.

Although ether has seen some recovery, futures market data suggests that the asset could see a bigger rally. The recent decline triggered a massive liquidation of perpetual long positions, reaching a level last seen in November 2022. Shayan said the liquidation indicates that the futures market is cooling off and many leveraged positions have been eliminated. Such a development and increasing pressure from spot buying may allow for renewed interest in the market.

“With the futures market potentially reset, if demand returns, Ethereum could be poised for another impulsive bullish push in the longer term. The cooling of the futures market could attract new buyers and stabilize the market, leading to a potential recovery from the recent downturn,” Shayan added.

ETH Price Outlook

While Shayan’s analysis suggests a bullish reversal for ETH, the asset’s daily and hourly charts may indicate otherwise.

Ether is seeing a substantial bullish response near the critical $2,100 support level and strong demand around $2,000, reflecting investor interest and confidence in its long-term potential. Still, the asset is facing resistance at the $2,800 threshold. This resistance level includes the lower boundary of the wedge previously broken during Ether’s drop a few days ago.

A recent analysis published on CryptoPotato revealed that as ETH continues to regain momentum, the $2,800 level could hamper the upward momentum and trigger a reversal towards the $2,000 support level.