Recent reports have revealed that Ethereum has had a arduous run, underperforming compared to other major cryptocurrencies. However, despite this, there may be some positive signs on the horizon.

According to CryptoQuant analyst Percival, interest in Ethereum has increased significantly, indicating growing investor optimism about its potential growth.

Ethereum rally potential and benefits of long positions

According to data shared by Percival, Ethereum’s open interest stands at $9.6 billion, up 28.57% from August, although still below the $13 billion recorded in June.

An augment in the number of open positions indicates expectations for price increases, and many traders are positioning themselves for increased demand.

Percival noted that several factors, including potential Federal Reserve interest rate cuts and a growing focus on the future of tokenization on the Ethereum blockchain, could fuel this growth.

This change could augment interest in decentralized finance (DeFi) protocols, making Ethereum more attractive to investors seeking long-term returns.

Percival also highlighted that Ethereum’s Relative Strength Index (RSI) is 61, which suggests the market is overheated.

The “convergence” between open interest levels and RSI levels indicates that price corrections are likely to be short-lived, giving investors a chance to prepare for a market rebound.

The analyst estimated that Ethereum could experience a correction of around 7% to 9% before rising again, favoring long positions as investors wait for a potential augment in both price and demand.

Specifically, the analyst wrote in a post on the CryptoQuant QuickTake platform:

The convergence of the highest lows on the RSI suggests the potential for a less pronounced correction, estimated at 7-9%. This scenario favors long positions, with investors patiently waiting for the market to rebound to confirm up-to-date highs and higher lows.

ETH’s way to a bullish breakout

At the time of writing, Ethereum is trading at $2,611, down a slight 0.1% over the past 24 hours. This comes after a sturdy week that saw the cryptocurrency grow 9.3% and almost 15% over the past month.

According to another prominent cryptocurrency analyst, Ali, Ethereum may be on the verge of significant growth. In a recent post on X Ali revealed that Ethereum recently touched the lower boundary of the channel, a level that has led to an average price augment of 130% in the past.

According to Ali, if this pattern continues, Ethereum could potentially rise to $6,000 as long as it holds the key support level of $2,300.

Any bounce from the lower boundary of this channel has historically led to an average price augment of 130%. #Ethereum.

If this pattern continues, a similar move could push $ETH up to $6,000 – provided the key support level of $2,300 remains intact. pic.twitter.com/CFpLrQWEih

— Ali (@ali_charts) October 14, 2024

So far, despite the volatility of the ETH market, the asset has managed to keep its price above the critical support level of $2,300, which lends credence to the theory that a bullish breakout is coming.

Featured image created with DALL-E, chart from TradingView