Ethereum’s Netflow continues to surge due to the exodus of short-term holders! Will ETH price maintain its bullish momentum?
The new year saw an uptick in cryptocurrency buying sentiment, boosting the overall market capitalization by more than 5%, reaching $1.84 trillion, a level last seen in May 2022. This surge helped BTC and ETH prices break through key resistance levels. However, there is a risk of modification. On-chain data suggests that short-term buyers currently earning high profits may sell at higher levels, potentially creating selling pressure.
Ethereum’s Netflow continues to surge.
Ethereum’s price, which had been hovering in a bearish consolidation range, finally found a breakthrough above the notable $2,400 level. This upward movement resulted in a total of $25.8 million in liquidations, with sellers offloading more than $16.4 million in positions.
However, a waning buying momentum was observed as Ethereum’s price rise stalled above $2,430. The change occurred as short-term buyers cashed out their positions to secure maximum profits on the recent surge. About $9.4 million in long positions were liquidated during this period, according to data from Coinglass.
According to data from IntoTheBlock, the potential for bearish momentum is growing, as evidenced by the continued rise in Netflow over the past week. After falling to -111K ETH on December 26th, there was a noticeable change as inflows began to exceed outflows and more Ethereum moved to exchanges.
As a result, Netflow has moved into positive territory, currently sitting at 45.5K ETH, as buyer confidence in the ETH price increases. Typically, a rise in Netflow indicates weakness. That said, increased inflows of assets into an exchange are often a sign of selling at or near market peaks.
The hourly short/short ratio is in a bearish trend and has fallen below the 1.0 threshold and is currently trading at 0.8769. This indicates that the downtrend is under control and approximately 53.2% of positions are expecting a decline in value. In contrast, only 46.7% of positions expect the price of ETH to increase.
What’s next for ETH price?
Ether was recently rejected at a price of $2,433 and is targeting a price correction in the coming hours. This indicates that the bears are putting pressure on higher levels. At the time of writing, the price of ETH is trading at $2,370, up more than 2.9% from yesterday.
On the bullish side, prices remained above the 20-day exponential moving average (EMA) of $2,333, raising hopes. But if buyers don’t get the price above $2,500 soon, there’s a risk that sales will increase.
If the 20-day EMA is violated, ETH price may fall towards the upward support at $2,250.
Conversely, a successful breakout and closing above the channel would be a sign that the bulls are still in the game. In this scenario, buyers could attempt to push the price above $2,433-$2,500, targeting an upward trend towards $3,000. Now that RSI levels have stabilized, we can see a strong bounce from the EMA20 trendline.