Ethereum is facing resistance at $3,500, but new data suggests increasing confidence from traders and institutional investors.
Despite recent bearish trends, Ethereum’s long-term outlook is supported by sustained demand from market participants.
“Ethereum’s leverage is returning to levels that indicate strong confidence that prices will rise in the future,” analysts at COINOTAG say.
Ethereum continues to face resistance at $3,500, but the increase in trader confidence is notable. Does the long-term outlook look more positive at first glance? Ethereum’s estimated leverage ratio reflects traders’ increasing confidence in using leverage in favorable market conditions. This trend is in line with historical leverage peaks and suggests a healthy risk appetite among traders. Ethereum’s funding rates have also remained positively stable, indicating a continued demand for long positions. The fact that traders are willing to bear the costs to maintain these positions is a positive sign for the price to rise.
Ethereum fund holdings have reached their highest levels in months, reflecting growing institutional interest, suggesting growing confidence among both institutional and retail investors despite recent market volatility.
According to the latest data, Ethereum is currently trading at $3,395.85, down 0.7% over the past 24 hours. The asset continues to face resistance at $3,500 while finding support at $3,250. This price action reflects the ongoing downtrend following the failed breakout above $3,750 seen in December.
Market sentiment is currently uncertain, with traders trading in a narrow range amidst conflicting signals. The Relative Strength Index (RSI) is at 43.27, indicating neutral market conditions, but below the critical 50 level, indicating a bearish reversal. Also, the Moving Average Convergence Divergence (MACD) is showing a negative histogram, with the MACD line positioned below the signal line, supporting the bearish outlook.
While these indicators confirm the bearish momentum, the narrowing histogram suggests that selling pressure may be abating.
Despite the current uncertainties, trading volume remains at moderate levels, indicating a lack of firm commitment from market participants.
The lack of significant trading swings highlights the current consolidation phase, with bulls and bears hesitant to trade heavily.
Overall, Ethereum is currently at a critical turning point. A break above the $3,500 resistance could revive bullish sentiment and accelerate the recovery. On the other hand, a drop below the $3,250 support could expose Ethereum to further downside risk.