Key Points
- Ethereum has been showing signs of accumulation from investors in recent weeks.
- The momentum could potentially turn into FOMO, leading to further gains for ETH.
Despite criticism from Peter Brandt who labelled Ethereum (ETH) as a “junk coin,” the cryptocurrency has been attracting bullish interest.
On April 8th, ETH experienced a 6.5% rally. This surge occurred despite a bearish chart pattern predicting a drop to $2800. The question remains whether this is a temporary retracement or the beginning of a more significant downtrend.
Coinbase Premium Index and Exchange Reserves
The Coinbase Premium Index, which represents the price difference between Binance and Coinbase, saw a decline toward zero from April 2nd to 7th. This happened while ETH was recovering its recent losses.
Post the drop to $3056 on March 19th, Ethereum’s exchange reserves began to decrease. This trend suggested that users were moving their tokens out of centralized exchanges, indicating accumulation and a decrease in selling pressure.
Short Liquidations and Potential Gains
A significant amount of Ethereum short liquidations were observed over the past two days, with data from CryptoQuant showing it was worth just over 17k ETH. These liquidations, once triggered, can open market buy orders and potentially drive prices higher.
Combined with the disbelief observed with the Coinbase Premium Index, it seems likely that Ethereum could potentially outperform the bears if the rally continues. This could lead to a short squeeze and Ethereum hitting the $4k mark again this week. The current disbelief could quickly transform into FOMO.
