Recently, in the last week of June, Ethereum's price saw a strong increase, decisively breaking through and retesting the key $2,500 level.
This upward trend reflects the significant price movement of the ETH cryptocurrency, driven by various factors indicating strong bullish sentiment, but as ETH begins to consolidate in the $2400 to $2500 range, warnings of potential short-term volatility have also emerged.
Even renowned analyst Degen Hardy cautiously pointed out that as long as ETH remains above $2,400, he will continue to hold long positions. He believes that if ETH drops below $2,400 in the short term, it would indicate that bulls struggle to reclaim the untested weekly highs.
As the second-largest cryptocurrency by market capitalization at $295 billion, Bitcoin is in the spotlight, as understanding these potential forces is crucial for traders and investors. Continue reading to learn more.
The impact of sentiment shifts and short-squeeze.
A recent research report by CryptoQuant analysts shows that Binance's funding rate has shifted from negative to positive. This indicates that leveraged long positions are actively betting on the continued rise of ETH prices.
Analysts believe this reflects widespread optimism but also raises serious concerns about the market being 'overheated', suggesting that after a short-term pullback, the market might rise further.
Capital inflows hint at potential selling pressure.
Analysts further added that despite the strong recent price movements, on-chain data still raises warnings, mainly due to the easing geopolitical situation, with warring nations agreeing to a ceasefire.
Data shows that Binance has seen an inflow of 177,000 ETH over three consecutive days. The likelihood of ETH inflowing to exchanges is higher as some large holders may be preparing to take profits or reallocate their assets.
Ethereum's short-term outlook awaits correction.
Ethereum's surge clearly highlights aggressive speculative activity, but the significant inflow of ETH into Binance also indicates impending selling pressure.
Even analysts like Hardy remain cautious, willing to close positions if bulls cannot push the prices higher in the short term. This increases the likelihood of an impending market downturn, as the market may seek to normalize the current overheated funding dynamics.
Although a pullback may occur in the short term, the potential long-term bullish structure of the Ethereum cryptocurrency price appears to be intact.
Moreover, if the lower boundary of the range is broken, a short-term decline could pull the ETH price down to the June 22 low of $2120, but if the upper boundary is broken, the minimum target is set at $2620.