Ethereum has been under pressure recently, with its price declining by over 7.8% since November 12. After failing to breach the critical resistance level of $3,454, Ethereum price today trades around $3,100, inching closer to the significant $3,000 mark. Here’s what’s happening in the market and what it could mean for Ether price.
The $3,000 level is psychologically crucial for Ethereum. If ETH closes below this support, it could decline further to test its 200-day Exponential Moving Average (EMA) near $2,806.
On the other hand, If Ethereum price breaks above the $3,454 resistance could open the doors for a rally towards the $4,000 level, which has remained a major psychological barrier.
The daily Relative Strength Index (RSI) has dropped to 58 from its recent overbought level of 70. A continued decline below the neutral level of 50 could signal further bearish momentum for Ethereum price.
Speculative trading around Ethereum is surging. Data from CryptoQuant shows that ETH reserves on derivative exchanges reached 11.28 million, the highest in over a year. Additionally, the derivative exchange supply ratio stands at 0.09, meaning 9% of Ethereum's total supply is held in derivatives.
This spike in leveraged trading can amplify price volatility. Unexpected price movements could trigger forced liquidations, influencing Ether price trends either positively or negatively, depending on how traders position themselves.
Ethereum’s open interest hit a new all-time high of $18.31 billion, reflecting a $4 billion increase since the start of the month. This rise indicates that traders are actively opening new positions. Positive funding rates suggest that long positions outnumber shorts, pointing to a bullish sentiment among leveraged traders.
Despite the optimism in derivative markets, broader market sentiment remains bearish. According to Market Prophit, weak demand could prevent a strong recovery for Ethereum.
The next few days are crucial for Ethereum. If it fails to hold the $3,000 level, it risks deeper losses. Conversely, reclaiming $3,454 could spark a bullish rally towards $4,000, reviving optimism in Ethereum news today.