According to CryptoPotato, a CryptoQuant analyst suggests that Ether (ETH) could experience a rally soon, based on metrics in the cryptocurrency’s futures market. The analyst, Shayan, noted that ETH recently underwent a significant liquidation event, which historically precedes price rallies as markets stabilize and spot buying pressure increases.

Earlier this month, ETH's price declined sharply, losing nearly 34% of its value. CoinGecko data shows that Ether fell from $3,329 to $2,197. This drop led to investor speculation about further declines. However, significant buying activity around the $2,100 region helped the asset rebound slightly to the $2,500 level. At the time of writing, ETH was trading at $2,623, down 2.3% in the past 24 hours.

Despite some recovery, futures market data indicates that ETH may see a more significant rally. The recent decline caused a massive liquidation of long perpetual positions, reaching levels last seen in November 2022. Shayan explained that this liquidation suggests the futures market is cooling, with many leveraged positions being flushed out. This development, coupled with rising spot buying pressure, could renew market interest.

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

While Shayan’s analysis points to a bullish reversal for ETH, the asset’s daily and hourly charts may suggest otherwise. Ether has shown a substantial bullish response near the critical $2,100 support level and strong demand around $2,000, indicating investor confidence in its long-term potential. However, the asset faces resistance at the $2,800 level, which includes the previously broken lower boundary of the wedge during Ether’s recent plunge.

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