Key Points
The futures market data reveals a robust bullish sentiment. Key resistance and support levels have been identified through order book data. In the first two weeks of February, Ethereum was trailing behind Bitcoin. During that period, Ethereum was struggling to surpass the resistance levels of $2.5k and $2.6k. In contrast, Bitcoin was easily exceeding the resistance levels of $48k and $50k.
Ethereum has now caught up in terms of performance. This progress was accompanied by a significant increase in speculative activity. The momentum behind Ethereum had bulls eager to make quick profits.
On April 5th, 2022, Ethereum’s OI reached $7.6 billion. However, it rapidly fell in the subsequent two months as Ethereum prices declined from $3.4k to $1.2k. At the time of writing, the OI was at $7.8 billion as prices reclaimed the significant $3k level.
Market Sentiment and Volatility
This development was a clear indication that buyer sentiment was strong. Such swift growth also allows for price volatility in lower timeframes. Therefore, traders using high leverage should exercise extreme caution.
The 7-day moving average of the funding rate tells a similar story. It has been on an upward trend over the past month following a quiet January. This chart further strengthens the bullish expectations of market participants.
Following a consolidation period in January, there was an upward expansion in February. The potential height of prices remained uncertain. However, the funding rate was not as high as it was in late December.
On December 31st, the funding rate surged, almost reaching the October 2021 highs. This indicated a one-sided market as traders anticipated a breakout past the $2.4k resistance. Instead, a correction to $2.1k occurred, followed by significant volatility in the lower timeframes to seek the massive liquidation levels of overeager bulls and bears.
Order book data from MobChart was analyzed. The $3.3k level has $8.84 million worth of limit sell orders, with another $10.36 million at the $3.6k level. On the other hand, the round number support levels at $3.2k, $3.1k, and $3k had $4.77 million, $3.16 million, and $3.1 million worth of limit buy orders respectively. These are the key levels to keep an eye on.
In other news, a recent report highlighted that the demand for Ethereum remained high. On-chain metrics were positive and suggested the possibility of further gains.
