Ethereum Price Analysis: Can ETH Break the $2.9k Resistance in Liquidity Hunt?

• Ethereum has recently witnessed gains that may not be attributed to strong organic demand.
• The coming days could see Ethereum prices reach up to $2,900 due to market dynamics.
• Vitalik Buterin has endorsed a new proposal aiming to introduce multiple-block proposers in the Ethereum network to counter centralization risks.

Ethereum price action shows potential resistance, major gains might be unsustainable. Learn more about the critical levels and market sentiment affecting ETH.

Ethereum’s Recent Price Gains and Institutional Interest

Ethereum [ETH] has seen some notable upward price movement recently, reaching $2672 at the latest count. This surge was underpinned by a marked increase in institutional interest and whale accumulation of ETH, suggesting that significant players are maneuvering in this space. However, these gains might not be purely driven by organic demand.

Resistance Levels and Market Dynamics

The overhead resistance between $2580-$2680 poses a critical challenge for Ethereum bulls. Historical data from January and February indicates that the bulls need to convert this resistance zone into support to sustain the uptrend. Technically, the daily RSI levels stand at 37, signaling persistent downward momentum, while the CMF at -0.1 points to substantial capital outflows from the market. This undercuts recent price increases, hinting that the market rally could largely be fueled by short-seller liquidity rather than robust demand.

Speculative Sentiment and Open Interest Data

Despite a 27% bounce from Monday’s lows, the open interest in Ethereum futures has only marginally increased from $7.07 billion to $7.79 billion. This negligible uptick relative to the price surge indicates a lack of strong bullish sentiment among speculators. Nonetheless, the spot CVD suggests a slow but positive trend, offering some hope for Ethereum bulls. Analysis reveals that long positions are starting to gain an upper hand, with the cumulative liquidation levels delta turning increasingly positive.

Outlook for Near-term Price Movement

With significant liquidation levels near $2791 and $2845, Ethereum might face tough resistance around these price points. While the positive delta in liquidation levels provides some bullish traction, it’s not sufficiently overwhelming to predict sustained price gains. Therefore, any progression beyond the $2845-$2900 zone might struggle, potentially leading to a price reversal.

Conclusion

In summary, Ethereum’s recent price rally seems primarily driven by liquidity dynamics rather than genuine demand. Technical indicators and speculative sentiment hint at potential resistance, suggesting that the gains might not be sustainable in the short term. Investors should watch closely for the $2580-$2680 resistance zone and prepare for possible market corrections beyond the $2845-$2900 level.