Ethereum, the 2nd-biggest crypto asset in terms of market capitalization, has recently been experiencing turbulent times. ShayanBTC, a well-known crypto analyst on the on-chain analytics firm CryptoQuant, disclosed that Ethereum saw a huge price slump, igniting apprehensions among investors concerning the further extension of the bearish trend. Nonetheless, the latest data from the futures market indicates the chances for a likely bullish rebound for Ethereum.
Ethereum's Market Shakeout: Is a Bullish Rebound on the Horizon?“With the futures market potentially reset, if demand returns, #Ethereum could be poised for another impulsive bullish surge in the longer term.” – By @ShayanBTC7 Read more https://t.co/BVutMVMycr pic.twitter.com/C4aB97LAis
— CryptoQuant.com (@cryptoquant_com) August 12, 2024
The Latest Shakeout in the Ethereum Market Ignites Speculations Concerning a Likely Price Rebound
One of the chief indicators that the analysts consider includes the long liquidation pattern in the futures market of Ethereum. Long liquidations denote the long positions’ forced closure. In this respect, traders reportedly bet on the rise in Ethereum’s price. The liquidation of these positions often mounts a downward pressure, influencing the market significantly. This paves the way for a price plunge.
Nonetheless, during the bull markets, liquidations of this type can contrarily lead to a price rally. A possible reason behind this is the stability of the futures market. The recent downturn in the market has ignited a lengthy liquidation cascade. Simultaneously, the volumes have reached the levels that have not occurred since 2022’s November. This enormous liquidation signifies a substantial reset in the futures market.
The Development May Lead to the Addition of More Purchasers, Rekindling the Interest for a Rebound
Several over-leveraged positions saw their elimination, likely making the way for an additional firm market environment. The decreased activity in the futures market may result in a shift in the overall investor sentiment. With the elimination of several leveraged positions, the market might add new purchasers, particularly if they consider Ethereum to be oversold. According to the CryptoQuant analyst, the respective rekindled interest could lead to the momentum required for a price rebound.
