Coinglass data revealed that Open Interest has risen from $10 billion to $13 billion for ETH since the second week of August.
This helps explain the rising ELR, but with the price trading beneath a key resistance, it can be interpreted as a warning sign for traders. The liquidation heatmap with a 1-month lookback period noted that the $2,730 zone is cluttered with liquidation levels. The ETH/BTC chart has been trending south for just over 18 months, with Bitcoin trading 8% below its all-time high, while Ethereum is 46.3% away from its all-time high. The estimated leverage ratio (ELR) is calculated by dividing the Open Interest by the exchange’s coin reserves. Overall, the lack of organic demand and L2s capturing more participants and transaction activity remains a problem for the mainnet and its investors. The proposed improvements for the Proof of Stake system and upgrades considered for the network at large could, when implemented, address network revenue, user growth, adoption, and other issues.
In turn, this could drive demand. As things stand, a rocky ride could be ahead for ETH on the price charts. However, the ongoing upgrades and improvements for the network at large could eventually drive demand and push prices higher. At press time, Ethereum was trading within a range that reached from $2.8k to $2.2k.
The $2.8k region has served as a steady supply zone since early August and confluences with the 50% Fibonacci retracement level.
Ethereum Surges Ahead: The Latest Developments and Predictions for ETH’s Future
Ethereum, the world’s second-largest cryptocurrency, has faced rejections from the $2.7k resistance zone since August. Technical analysis gave clues that ETH bulls might lack the strength to drive the crypto’s price beyond $2.9k too.
In conclusion, Ethereum’s performance demonstrates that a breakout above the $2.7k resistance zone could be a challenge. The climbing leverage ratio metric highlighted why a breakout might be unlikely. The 3-month chart demonstrateed that the $2,730-$2,850 area is crucial.
Together with the price action, we can see that a bearish reversal from these levels is a likelihood that traders must be prepared for. The altcoin’s performance must be considered in the context of Vitalik Buterin’s vision for the next possible upgrade, “The Surge.” This upgrade aims to improve transaction per second and maximize interoperability between Layer 2 (L2) scaling solutions.
Ethereum’s performance can be partly explained by inflationary concerns since the Dencun upgrade, but it’s just a small part of the puzzle. Traders must be prepared for a potential bearish reversal at these key levels.
