According to Glassnode data, the sudden spike in the prices of Ethereum has been attributed to a large short squeeze in the futures markets. Over $97 million worth of bets were taken out in just an hour, pushing the price up by around 12%.
Ethereum Price Breakout Triggered by Merger
The price of Ethereum rallied on Saturday as news about the proposed merger between the two main platforms continued to dominate the market. Although the news remains influential, the volatility in the near term is not expected to ease.
The price of ETH fell by 1.8% to close at $1,328 after failing to break above two strong resistance levels. These resistance levels were the 50-day and the descending trendline, which formed a price ceiling in May.
The price of Ether rose by more than 40% on July 13 and 16 as investors started to anticipate the upcoming merger. The rally was mainly attributed to the euphoria surrounding the event. The appearance of a golden cross on Ethereum’s four-hour chart boosted the bullish sentiment among technical analysts.
Looking at the current trends, a break above $1,500 would ideally lead to a target of $2,000 and a June high of $1,972. However, a delay in the September merger could cause the price to fall.
The price of ETH is supported by the rising 50-day and 100-day exponential moving averages (EMAs). This move suggests that a break above $1,500 is likely to lead to a potential target of $2,000. A significant turning point in the trendline connecting the two major averages would also provide a bullish cross.
ETH Price Risks Fakeout
Since July 13, the price of Ether has rallied more than 40%. It broke above its critical horizontal resistance, regarded as an ascending triangle pattern.
A bullish reversal typically follows a continuation pattern known as an ascending triangle. However, in some cases, it can also occur at the end of a downtrend.
Independent analyst Scott Melker noted that the exit of ETH from its ascending triangle pattern was a bullish sign that suggested that the market would continue to rally. He said a break above $1,284 would lead to a potential price spike.
Although the price of Ether has broken above $1,284, it is still in a consolidation phase and is in a potential breakout zone. Its close above the upper trendline of the ascending triangle does not imply a significant increase in trading volumes. This move suggests a weakening of the upside momentum.
If the price of Ether breaks below $1,284, it could trigger a potential reversal and return to the descending triangle pattern. It would cause the price to fall to around $750, which is 45% below its current level.
Cardano Also Rallies
For the week ended May 12, ADA was up 0.17% at $0.4628. It started the week with a decline to a low of $0.4026 before moving higher. The bulls were able to reclaim the May 12 low of $0.3919 and take the market back to the upside.
The delay in the Vasil hard fork provided little support to Cardano. It is now waiting for the Fed’s monetary policy decision. The ADA could test the July high of $0.4923 and the June high of $0.6688.
The 4-hourly and 100-day exponential moving averages (EMAs) identify potential support and resistance levels. Meanwhile, a bullish cross of the 50-day and 200-day averages could be seen at the beginning of a move higher.
Source: https://crypto.news/ether-eth-rallies-after-a-large-short-squeeze-in-the-futures-market/