Key Points
- U.S. investors continue to buy ETH despite its recent market decline.
- Technical patterns suggest potential for a market upswing.
Despite a recent downturn in the cryptocurrency market, U.S. investors are actively purchasing Ethereum (ETH).
U.S. Investors and ETH
Despite the 8.41% decline in ETH over the past 24 hours, U.S. investors appear prepared to drive its prices higher. This is evidenced by data from Crypto Quant’s Coinbase Premium Index for Ethereum, which measures the price difference between ETH on U.S.-based Coinbase Pro and global exchange Binance.
A positive reading on this index suggests a strong buying interest among U.S. investors. Currently, the index stands at a positive 0.03, indicating continued confidence even amid market volatility.
Mixed Market Sentiment
While U.S. investors back a potential rally, sentiment within other sectors remains divided. Some retailers are optimistic about ETH’s future, with active and new addresses showing a bullish sentiment.
In the past few days, there has been an 18.34% increase in new addresses and an 11.61% rise in active addresses. This high level of activity suggests a steadily increasing bullish sentiment.
However, the negative Funding Rate for Ethereum presents a contrasting view. It suggests that a majority of retail traders expect a price decline and are ready to pay a premium to maintain their short positions.
ETH’s Future Movement
ETH recently broke down from a consolidation phase, which is usually marked by significant accumulation by whales in anticipation of a rally. This downturn may be due to a stop hunt, a strategy used by large institutions to manipulate asset prices to activate stop-loss orders.
This strategy allows them to buy or sell large quantities at favorable prices before the market stabilizes. In this case, it enabled institutional traders to accumulate more ETH at lower prices, which could potentially trigger an upward rally.
However, the sustainability of this rally depends on whether the support level at $2,552.99 doesn’t turn into a resistance, which would limit upward price movement. A breakthrough above the $2,723.83 resistance level would further confirm the bullish presence in the market.
