- Buying volume in the derivatives market has surged to its highest point of the year.
- The technical chart indicated that Ethereum has the potential to reach the $3,440 level if buying momentum persists.
Ethereum’s [ETH] current price level of $2,732 follows a month-long decline of 16.15%, steering the market in the bears’ favor.
However, early signs of a potential reversal are emerging, as ETH closed the past week with a 2.08% gain.
The surge in buying volume in the derivatives market and the technical pattern on the chart could play a major role in ETH establishing a new market high.
Buying volume reaches a new high
At the time of writing, the Taker Buy Sell Ratio—a metric used to determine market sentiment by indicating whether buying pressure (above 1) or selling pressure (below 1) is dominant—shows that buyers are in control.
Currently, this ratio has reached its highest point of the year, with a reading of 1.13, meaning buyers in the market are more aggressive as they acquire more of the asset.
Source: CryptoQuant
The Funding Rate, another key metric for gauging sentiment in the derivatives market, confirms this trend. It currently reads 0.0050%, indicating that buying activity is predominant.
The Funding Rate measures which side of the market is paying the premium. When positive, as is the case with ETH at the moment, it suggests that longs are paying the premium to maintain their positions, reflecting growing confidence in the asset.
This confidence, as observed by AMBCrypto, could translate into a major price swing for ETH, potentially pushing it to the $3,440 level as a bullish pattern forms on the chart.
Is a major rally in sight for ETH?
On the chart, ETH was approaching the upper resistance level of the symmetrical channel it is trading in. This pattern forms when support and resistance levels converge, signaling a period of market accumulation.
When the price breaches this level, it typically marks the beginning of a series of successive rallies. However, if ETH breaks through this resistance level, it will encounter another key resistance at $2,798.34, which could temporarily slow the rally.
If buying momentum remains strong, ETH could surpass this resistance level and trade significantly higher, reaching $3,442—a 23.06% rally.
Otherwise, ETH may continue consolidating within the symmetrical triangle, potentially making another breakout attempt later.
Source: TradingView
Liquidity flow surges
According to Artemis, Chain Netflow—a metric used to assess liquidity inflows and outflows within the ecosystem—indicates a massive surge in Ethereum liquidity.
Over the past seven days, total Netflow stands at $100.7 million, meaning more inflows than outflows during this period.
A key takeaway from this trend is that market sentiment remains decidedly bullish, making a major rally only a matter of time.
