Ethereum (ETH) continues its upward trajectory, currently trading above $1,960 after stabilizing around the $1,920 mark during the latest trading session. The asset recently peaked at $2,089 before slightly retreating, indicating strong market interest and the likelihood of further consolidation above the crucial 100-hourly Simple Moving Average.
In a considerable show of strength, trading volume surged by 15% over the past 24 hours, reaching a hefty $26 billion. This volume represents nearly 11% of ETH’s circulating market cap, a clear indication of robust buying interest in the current price range.
Short Sellers Under Intense Pressure
Short sellers found themselves in a precarious position as liquidations soared beyond $250 million across crypto markets in a single day. Over the past three days, the total eclipsed $50 million, as bullish traders vigorously defended the pivotal $2,000 level. Traders are acutely focused on the $2,150 resistance mark—breaking through that level could trigger a significant short squeeze, propelling ETH prices towards $2,800, representing an impressive 40% increase from current levels.
On the technical front, the relative strength index (RSI) has crossed above its 14-day moving average, hinting at an emerging buy signal on the daily chart. Conversely, should ETH dip below $1,960, the next support levels to watch are $1,930 and $1,880, with the primary floor identified around $1,840.
Exchange Reserves Plummet to New Lows
On the blockchain side, on-chain data reveals that Ethereum’s exchange reserves have plummeted to an alarming 16 million ETH, marking a multi-year low. This represents a stark decline from over 23 million ETH earlier in 2023, indicating a loss of roughly 7 million ETH over a mere three years.
This trend of decreasing reserves is particularly noteworthy during times of price weakness, which typically would prompt holders to transfer coins back onto exchanges for selling. Instead, current patterns suggest that holders are choosing to move their ETH into staking contracts, cold storage solutions, and decentralized finance (DeFi) protocols, reducing the available supply for immediate sale.
The shrinking exchange balance implies less ETH is accessible for rapid selling, reinforcing bullish sentiment in the market. Notably, the hourly chart has flashed two buy signals after ETH rebounded from the $1,900 level, with one earlier signal reflecting a compelling 2.35x risk-reward ratio, while the second is in development, showcasing a 0.6x return at present.
The near-term target remains set at $2,150, offering a promising outlook for ETH as it continues to navigate through this critical phase. Currently, Ethereum trades just above the $1,960 mark, amid a backdrop of dwindling exchange reserves, presenting an intriguing landscape for prospective investors.
