Signals of Reversal in Ethereum: Technical Indicators Signal Positively
Ethereum's recent price movements offer potential buying opportunities for investors despite its relative weakness against Bitcoin. While signals of change are being received in market dynamics, technical indicators suggest that Ethereum may be in a low-risk bottom formation.
Despite the price fluctuations and high-volume liquidations occurring in the short term, Ethereum's technical structure is noteworthy. For cautious investors, this may create an attractive buying area. According to CryptoQuant Insights data, if ETH closes above the 50-week Moving Average, this will be a clear signal of a bullish start. This scenario resembles the strong rallies experienced in October 2023 and November 2024.
Importance of the 50-Week Average and Possible Breakout
Ethereum is currently trapped below the 50-week moving average. This level historically stands out as a significant resistance area. A weekly close above this average would indicate a strong technical breakout and could be the first clear sign of a transition to a bull market. Such a development could increase demand for Ethereum, creating new upward momentum in prices.
Selling Pressure Weakens, Bottom Formation Strengthens
Another strong signal regarding Ethereum's potential bottom formation comes from the seller exhaustion indicator. This indicator is derived from the product of 30-day price volatility and the supply in profit, which has currently declined to its lowest levels since January 2024. This indicates that selling pressure in the market is weakening and the risk of a downturn is decreasing. Such an environment creates favorable conditions for price stability and a gradual recovery.
ETH/BTC Performance: Relative Weakness Continues
Ethereum's relative performance against Bitcoin still remains weak. The ETH/BTC Spent Output Profit Ratio (SOPR) has been below 1 for a long time. This indicates that investors are making less profit from ETH transactions compared to Bitcoin or are incurring losses. Although a brief recovery was observed in April, the overall outlook suggests that the weak trend continues. This metric stands out as critical data for investors trying to balance their portfolios between these two major cryptocurrencies.
Short Position Liquidations in Derivative Markets and Market Reaction
On June 16, a large-scale short position liquidation occurred in Ethereum, and approximately $500 million worth of positions were closed. This move indicated high volatility and risk levels in the derivatives market. However, the subsequent decrease in leverage might suggest that the market is undergoing a correction process and has settled on a more stable ground. This could lay the foundation for a more stable upward movement in the future.
Effect of Macro Developments: Geopolitical Risks Should Not Be Ignored
Despite the increasing geopolitical tensions on a global scale, Ethereum remains above the $2,400 level, while Bitcoin continues to hover around the $100,000 band. This situation indicates that investors need to make decisions not only based on technical analysis but also considering macroeconomic and geopolitical developments. The resilience exhibited by Ethereum in this environment shows that it maintains its strength as a digital asset. However, uncertainties that could arise from geopolitical developments should be taken into account; such factors can quickly change the market direction.
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