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Ethereum faces resistance at $3,500, yet emerging metrics indicate an upswing in trader and institutional confidence.
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Despite recent bearish trends, the long-term outlook for Ethereum remains supported by sustained demand from various market participants.
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As noted by analysts, “Ethereum’s leverage ratio is returning to levels indicative of strong confidence in future price progression,” according to COINOTAG.
Ethereum’s resistance at $3,500 persists, but metrics signal rising trader confidence. Is the long-term outlook more favorable than it seems?
Ethereum: What the metrics say
Source: Cryptoquant
Ethereum’s estimated leverage ratio has seen an uptick, indicating that traders are increasingly confident in utilizing leverage during favorable market conditions. This trend parallels the leverage ratio’s historical peaks, showcasing a healthy risk appetite among traders.
Source: Cryptoquant
Further supporting this player interest, Ethereum’s funding rates have remained positively stable, suggesting an ongoing demand for long positions. Traders appear willing to incur costs to maintain these positions, which is a bullish indicator for price growth.
Source: Cryptoquant
Notably, Ethereum fund holdings have surged to their highest levels in several months, indicating renewed institutional interest. This reflects a growing confidence among both institutional and retail investors despite recent market fluctuations.
Consolidation amidst bearish pressure
As of the latest data, Ethereum is trading at $3,395.85, showing a slight decrease of 0.7% within the last 24 hours. The asset continues to struggle with resistance at the $3,500 mark, while finding some support near $3,250. This price action reflects a continuous downtrend, a consequence of a failed breakout above $3,750 that occurred earlier in December.
Market sentiment is currently trapped in a state of uncertainty, as traders grapple with a tight price range amid conflicting signals.
The Relative Strength Index (RSI) stands at 43.27, indicating neutral market conditions; however, being below the critical 50 signal indicates a bias towards bearish sentiment. In addition, the Moving Average Convergence Divergence (MACD) displays a negative histogram, with the MACD line situated beneath the signal line, further supporting the bearish outlook.
Although these indicators confirm bearish momentum, the narrowing histogram suggests that selling pressure may be easing.
Despite the existing uncertainties, trading volume remains moderate, indicating a lack of decisive commitment from market participants.
The absence of significant trading spikes points to the present consolidation phase—both bulls and bears seem hesitant to embark on a vigorous trading spree.
Overall, Ethereum is currently at a critical juncture. A successful attempt to push above the $3,500 resistance might revive bullish sentiments and facilitate a recovery. On the other hand, a decline below the $3,250 support level could expose the asset to further downward risks.
Read Ethereum’s [ETH] Price Prediction 2024-25
Conclusion
In summary, while Ethereum navigates resistance at $3,500, the underlying metrics indicate a more optimistic outlook fueled by trader confidence and institutional interest. Investors are advised to monitor key support and resistance levels closely, as movements beyond these boundaries could significantly influence Ethereum’s price trajectory.
