Ethereum soars, beginning of the Altseason? Crypto analysis of March 06, 2024

Ethereum recorded an increase of over 16% last week and reached the $3,500 threshold. Let’s examine the future perspectives for ETH together.

Current Situation of Ethereum (ETH)

Ethereum continues its rise, reaching new highs. At the time of writing, one Ether is trading at approximately $3,850. Thus, the Ethereum price has crossed the 61.8% Fibonacci retracement level, calculated from its all-time high. It’s worth noting that ETH has recently experienced a bearish impulse which allowed it to test this level as support. It now seems to be targeting the 78.6% level, located just below $4,000.

Naturally, Ethereum has continued its bullish trend. However, it is worth mentioning that its price has significantly deviated from its 50-day moving average, indicating a period of high volatility that may lead to a correction. It is not surprising that the momentum of Ethereum has been revised upwards, which is well illustrated by the oscillators, indicating that a period of overbuying might currently be underway.

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Focus on Derivatives (ETHUSDT)

It can be observed that the open interest of ETH/USDT perpetual contracts has been significantly more volatile than the price of Ethereum itself. Although funding rates have been positive, this reveals a period of uncertainty among speculators. With that said, it is clearly visible that Ethereum’s recent drop was accompanied by a decrease in its open interest and liquidations of long positions. This indicates that many buying traders left the market during the last correction. Nevertheless, it is important to note that these positions have already been partially reopened, accompanying an increase in Ethereum. This phenomenon thus demonstrates a growing interest in cryptocurrency.

The one-month Ethereum liquidation heatmap shows that the cryptocurrency has recently bounced off a subtle liquidation zone around $3,300. The interest shown at this level was predominantly buying, which contributed to the subsequent rise in ETH. Currently, the most significant liquidation threshold under its current price is around $3,000. The price’s approach towards these levels could trigger a massive ordering, increasing the possibility of a period of increased volatility on Ethereum. These zones therefore represent crucial points of interest for investors.

Assumptions for Ethereum’s Price (ETH)

If Ethereum’s price manages to hold above $3,350, we might anticipate a bullish continuation up to the levels of $3,900 or even $4,000. The next resistance to consider, if the bull run continues, would be $4,100 or even $4,500. At this stage, it would represent a rise of over +17%.

If Ethereum’s price fails to hold above $3,350, we could envisage a return to $3,000. The next support to consider, if the bearish movement continues, would be around $2,800. At this stage, it would represent a drop close to -25%. 

Conclusion

Ethereum continues to show a bullish trend, crossing key Fibonacci retracement levels. Despite a recent bearish correction, Ethereum bounces back reaching new highs. Can we attribute this surge to the approach of the Dencun update? What is certain is that it will be crucial to closely observe the reaction of the price at various key levels to confirm or refute the current assumptions. It is also important to remain vigilant for potential “fake outs” and market “squeezes” in each scenario. Finally, let us remember that these analyses are based solely on technical criteria and that cryptocurrency prices can also evolve rapidly based on other more fundamental factors.

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