Ethereum Nears Resistance Despite Declining Open Interest! Will ETH Price Hold Buyers’ Hope?

In recent weeks, Ethereum’s price has witnessed a growing surge of confidence as the total crypto market cap prepares to gain old momentum. As Bitcoin’s dominance exhibits a minor downturn, traders are increasingly placing their bets on Ethereum. This has steered Ethereum’s price towards critical immediate resistance levels. Analysts are now keenly observing whether Ethereum will break the $2,500 mark, marking a significant surge, or if it will encounter a decline.

OI Loses Momentum Near High

Data from Coinglass reveals a recent decline in Ethereum’s open interest (OI), signaling a reduction in market momentum. The OI decreased from a peak of $7.95 billion to $7.57 billion, marking a drop of more than $380 million. This trend indicates that traders are actively closing their futures positions, which in turn is leading to a decrease in Ethereum’s volatility.

In the past 24 hours, Ethereum’s price experienced a total liquidation exceeding $15 million. This occurred as Ethereum struggled to break above the $2,300 mark, resulting in the liquidation of $10 million worth of long positions.

A recent report by crypto analytics firm IntoTheBlock shows that Ethereum’s market cap has surged by 87% in the past year, rising from about $149 billion to its present value of $280 billion. Despite this growth, Ethereum’s performance, when compared to other major assets, indicates that there is still room for improvement, particularly given the numerous positive developments the asset has undergone in 2023.

Ethereum’s Layer 1 scalability challenges and high transaction fees have halted the expansion of its DeFi ecosystem. Despite being a leading player in decentralized applications, Ethereum’s scaling limitations have resulted in high costs and slower transactions, leading to user and developer dissatisfaction.

In contrast, Solana has been advancing rapidly, outpacing Ethereum with its high throughput and low-cost transactions. Solana has been dominating the altcoin market recently with robust buying demand, capturing a significant market share and surpassing ETH.  

What’s Next For ETH Price?

Ether’s price surged past the 20-day Exponential Moving Average (EMA), reaching $2,300, but failed to hold momentum due to increasing selling pressure. Currently, bears are aiming for a decline to solidify their positions. As of writing, ETH price trades at $2,278, declining over 0.8% from yesterday’s rate.

Should the price remain above $2,300, it is anticipated that Ether might approach its 52-week peak of $2,403. This level is crucial for sellers to defend, as a breakthrough and sustained trading above this mark could trigger the next upward trend phase, potentially pushing the ETH price towards the $2,500 mark.

Conversely, if Ether faces resistance at this key level and starts to decline, it might retest the significant support level around $2,200. For the sellers to gain an advantage, they would need to break the ascending support line. In that case, we might see ETH price below the $2K mark.