Ethereum’s price dropped below $3250 on 19 March, down by 20% from the peak of last week: a trend that is rare in derivatives markets suggests ETH could soon rebound.
Some vital signals of market recovery have emerged after the market lost over $78 Billion in its capitalization during the last week. ETH Spot and derivatives markets
Ethereum derivatives traders prefer to hedge rather than exit
Ethereum, with a drop of 20% in its price ranking behind Dogecoin is now the second largest loser among the top 10 cryptocurrency markets.DOGESince the post-Dencun upgrade The sale began March 14, 2019.
It’s interesting to note that ETH speculative trader continue to display optimism, holding their positions and hedging them in hope of a recovery.
The open interest statistics of Coinglass represent the current capital invested into futures contracts on a certain cryptocurrency. The open interest data is a proxy measure of investor optimism about the short-term prospects for cryptocurrencies.
ETH opened interest soared from $14 billion to $4,092 when ETH prices reached a record high of 2024 at the end of March. The Dencun sale was followed by a sell-off. upgradeEthereum’s price has dropped rapidly by 20%, from $4,092 down to $3,207, a low for 14 days, on 19th March.
But interestingly, the chart above shows that while open interest has held steady, recording only a $900 million (6.4%) decline from the recent market top.
Open interest that declines significantly slower than spot prices indicates speculative bulls may have been hedging rather than closing their positions. This market recovery signal may be of interest to strategic investors for several reasons.
Long-term traders that hedge their positions will be less inclined to liquidate their investments in response to negative price fluctuations. They buy more contracts in order to offset or mitigate their exposure. Increased buying pressure may lead to higher prices for the asset.
The fact that an asset’s capital stock remains high despite a drop in price of more than 10%, such as the one observed over the course of the Ethereum markets during the past seven days, signals to market participants the optimism and long-term outlook held by traders despite this short-term volatility. This vote of confidence may encourage traders to return to the market.
Ethereum price prediction: Bulls can regroup at $3,200 level
According to the above-mentioned key signals, the Ethereum price may avoid excessive volatility over the next few days, as bulls aim to regroup around the $3,200 level of support to prepare for a recovery.
In/out of money data on IntoTheBlock displays historical asset accumulation trends. This shows a huge support cluster consisting of 1.5 million address that purchased 397.610 ETH for an average price of $3.223.
The key support cluster can effectively stop further falls below $3200.
The recent news about Fidelity adding a staking feature In its modified spot Ethereum ETF This week, filing could be a catalyst for a positive sentiment across the market.
If ETH can regain the $3,500 level in the next few days, the consolidation phase may evolve into a recovery of the market. This seems a difficult task, since the bull may face resistance from the 1.3 millions addresses who bought 841,670 ETH on average at $3,411.
In the next few days, it appears that a price consolidation in the range of $3,200-$3,400 is more likely.
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Source: crypto.news
