Ethereum surges 20% in 24 hours, driven by $265M in short liquidations and 184% rise in futures volume.
ETH breaks $2,331, with key support at $2,232 and resistance at $2,386 and $2,550 amid overbought MACD signals.
ETH/BTC undervaluation at 5y low is indicative of Ethereum outperformance opportunity, according to CryptoQuant.
Ethereum has gained historic gains of 20% in the last 24 hours, peaking at $2,331 one of the largest single-day percentages this year. The rally was mostly propelled by the tantrums of aggressive short liquidations and high derivatives activity. Although a macroeconomic storm continues, existing trends in Ethereum’s performance over the last month can be read as indications of trend reversal as the spectrum, which analyzes the technical and on-chain aspects, confirms the uptrend.
According to data from Coinglass, Ethereum futures trading volume surged by 184%, while open interest rose by 20% within a day. Over $265 million worth of short positions were liquidated, removing downward pressure and accelerating the price increase. Rising open interest alongside price is often interpreted as new long positions being opened, rather than just shorts being closed, indicating fresh capital inflow and bullish sentiment building in the derivatives market.
Ethereum’s price broke out from a rising channel that had been intact since April, surpassing the $1,950 support level and climbing past $2,200. The 50-period Exponential Moving Average (EMA) at $1,907 provided strong support, aligning with the previous lower boundary of the channel. The next resistance levels are projected at $2,386 and $2,550. However, the MACD indicator currently shows overbought conditions, suggesting a potential short-term pullback. A retest of $2,232, a previous resistance turned support, could provide a healthier base for continued gains. A failure to hold above this level may result in declines toward $2,101.
ETH/BTC Ratio Undervaluation and On-Chain Metrics
On-chain data from CryptoQuant indicates that Ethereum is trading furthest below its all-time value compared to Bitcoin since 2019, when referencing the ETH/BTC Market Value to Realized Value (MVRV) ratio. Such undervaluation has earlier accompanied phases of outperformance by Ethereum. This is with ETH potentially gaining ground over BTC as investors look for altcoin assets during overall market crypto volatility.
Despite the technical breakout, in global economic uncertainty, Ethereum’s price action plays out. However, geopolitical tensions where the U.S and China are involved and the Federal Reserve coming off the high interest rate tone, quantitative tightening is still being influenced by investor confidence. Any relaxation in these factors might delay the rally of Ethereum even more.
While Ethereum is up 54% on a month-to-month basis, it is down 26% year to date. The recent burst has pushed ETH over major resistance levels, raising the possibility of sustained trend reversal if momentum continues. Market participants are going to monitor confirmation via price stability above $ 2,000 and the ETH/BTC valuation gap closing down.
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