Ethereum’s mixed signal amid improved risk appetite

Ethereum is trading around near the 2.7K levels on Tuesday amid improved risk appetite in the crypto market. Ether is selling at $2.68K, down 22.57% from July 23, as of this publication.

Market indications, however, show that Ethereum encountered significant resistance at the $4,000 and $3,900 levels. A retracement resulted from this, although the 0.5 Fibonacci level provided solid support. The quick rise from $2,300 to $2,800 indicates fresh bullish momentum.

ETH appears to be trying to re-enter a significant wedge pattern based on the current market movement. In the upcoming sessions, the price may test $3,640 and even higher levels if there is a good breakout over the resistance zone.

While the broader 24-hour period indicates a slight advantage for Ether short sellers, the most recent 12-hour period up to publishing has turned positive, with 50.37% of positions being long.

According to CryptoQuant’s research, the Ethereum futures market shows that most traders are pessimistic, given that financing rates were negative earlier today. Periodic payments made to and received by long and short-term traders in response to fluctuations in the price of perpetual futures contracts relative to their spot counterparts are known as funding rates. It’s also employed as an emotion indicator to determine the bullishness or bearishness of traders.

As of this writing, Ethereum’s financing rate is roughly -0.0036, suggesting a predominance of short holdings. The 4-hour chart, where ETH broke through the rising bottom trendline of an ascending triangle on Sunday, further demonstrates the bearish attitude. This action suggests that sellers gather steam and may initiate a strong negative trend.

Since the US ETH ETFs have seen net outflows of $434 million since their inception, there is a good chance that the ETFs are a major factor contributing to Ether’s price fall.

Neither buyers nor sellers have been able to push the price significantly above or below this level despite their competition for supremacy, This kind of consolidation often precedes a breakout, so pay particular attention to these important levels!

Open interest spikes sometimes precede significant price swings, and as Ethereum is currently approaching significant technical levels, a move in either way is plausible. However, the overall picture is still positive, especially if the $2,828 breakout level is breached.