Ethereum (ETH) Price Surge and Market Analysis
The world’s second-largest cryptocurrency, Ethereum (ETH), has experienced a significant surge in price, with the value aiming to surpass $3,300 in the short term. At the time of writing, the Ethereum price is trading at $3,257, marking a 1.61% increase, and the market cap stands at $391 billion.
Ethereum’s Profit/Loss Ratio Peaks
According to on-chain data provider Santiment, Ethereum is currently witnessing the highest profit/loss ratio in nearly three months, surpassing even Bitcoin. The Ethereum network has observed a notable proportion of profitable on-chain transfers, boasting a ratio of 2.3 to 1 for coins moving at a profit compared to those at a loss. Similarly, Bitcoin’s ratio stands relatively high at 1.8 to 1 during this period, indicating increased profitability for transactions on both networks and suggesting positive sentiment among cryptocurrency holders.
Ethereum Price Action as Traders Turn Bullish
The ETH funding rate experienced a significant decline on February 26, dropping to as low as 0.02%. However, with market sentiment turning bullish, LONG position holders swiftly propelled the funding rate to 0.06%, marking a staggering 300% increase from the previous day. This resurgence in Ethereum futures traders’ confidence reflects a renewed conviction to push spot prices towards the next milestone, potentially surpassing the $3,500 mark.
IntoTheBlock’s global in/out of money data supports this viewpoint, indicating that approximately 80% of current ETH holders find themselves in a profitable position at the current price of $3,250. This scenario suggests that many holders may choose to hold onto their ETH rather than sell, thereby fueling the ongoing rally.
Resistance Levels and Potential Market Scenarios
The data highlights that the 1.03 million addresses that acquired 218,650 ETH at an average price of $3,300 could serve as a significant resistance level to overcome. Nevertheless, if bullish futures traders’ expectations materialize and this crucial resistance level is breached, it could pave the way for a rally above $3,500.
However, should prices dip below $3,000, the current prevalence of extreme leverage positions exposes ETH traders to significant losses, particularly if a wave of margin calls initiates a LONG squeeze. Popular crypto analyst Michael van de Poppe also mentioned the possibility of a 10-20% drop after the current run-up, emphasizing the potential for a dip opportunity before Ethereum visits $4,000.
Conclusion
The recent surge in Ethereum’s price, coupled with the high profit/loss ratio and bullish market sentiment, indicates a positive outlook for the cryptocurrency. However, potential resistance levels and the risk of significant price corrections should be carefully considered by traders and investors as they navigate the evolving Ethereum market.
📎 Source reference: coingape.com
