After a significant decline earlier last week, Ethereum (ETH), the second-largest cryptocurrency, has posted a modest rebound, reclaiming the key $2,600 level and heading back towards the $3,000 milestone.
August 5th to break downwhen Ethereum fell to $2,112, marked the market’s biggest decline this year. However, the digital asset has since rebounded by 8% over the past seven days, suggesting the possibility of a more sustained uptrend.
Massive Ethereum Liquidations Trigger Bullish Signals
According to a recent report According to market analysis firm CryptoQuant on ETH price action, the chart below shows the significant liquidation of long perpetual positions in the futures market that occurred during last week’s crash.
The firm notes that in sustained bull markets, such a significant liquidation event is often accompanied by a significant price rally as the futures market stabilizes and spot buying pressure begins to prevail.
“The recent cascade has triggered massive long liquidations, reaching levels not seen since November 2022,” the firm noted. “This significant liquidation likely indicates a cooling futures market, with many leveraged positions being washed out. This development could set the stage for renewed interest in the futures market.”
WITH futures market CryptoQuant believes that if demand returns, Ethereum could be poised for another impulsive rally in the long term that could push prices above previous all-time highs.
ETH Price Path to $3,000
Cryptocurrency analyst Caleb Franzen repeated a similar ETH price prediction in social media post on the X Platform (formerly Twitter), suggesting that if Ethereum manages to break above the $2,725 level, it could signal a powerful bullish move.
Franzen’s analysis of the 4-hour candles and market structure indicates a series of higher lows and a bullish reading on supertrend indicators, which further drives optimism regarding the future performance of Ethereum.
However, with ETH currently trading at $2,645, the first resistance on the ETH/USDT weekly chart at $2,700 proved to be the first hurdle the second-largest cryptocurrency had to overcome in recent days.
In a scenario where the current rally continues for the next few weeks and ETH price reaches the levels indicated by Franzen, $2,900 and $2,990 retaining walls will be the last obstacle on the way to regaining the $3,000 level.
On the upside, the token will need to hold and consolidate above the $2,550 level to prevent further declines towards the next support on the daily chart, which is currently located at $2,345 after a 25% correction.
Featured image from DALL-E, chart from TradingView.com
