Recent volatility in crypto markets has taken a positive turn as the market sentiment indicates optimism about the approaching U.S. Securities and Exchange Commission’s (SEC) decision to spot a Bitcoin ETF. This has been reflected in the second-largest cryptocurrency Ethereum (ETH), which has been on the rise, regaining support from the channel pattern as well as the 20-day EMAs.
The last ten weeks’ recovery in Ethereum has been tracked by a rising channel pattern. The lower trendline offered buyers a strong pullback, helping to prolong the recovery trendline. However, amid the third week of sell-off in the crypto market, the ETH price gave a bearish breakdown from the pattern’s lower support, causing an aggressive correction.
But buyers counterattacked by increasing their volume, and returned to the channel pattern. This allowed the ETH price to gain 4.5% intraday and reach $2341. This marks the previous breakdown as a “bear trap”. If the coin price can maintain its position above the previously reclaimed support, the price may be able to reach $2500, a 10% increase.
Funding rates have also surged, signaling confidence in a climb. Coinglass, a prominent cryptocurrency derivatives tracker, shows that ETH Funding Rates last year rose to 0.045% on Friday. An increase in funding rate signals traders’ bullishness on an asset, which means they are willing to pay more to hold long positions.
Other indicators also point to a further rally. The narrowest range possible Bollinger Band Indicator reflects an increase in volatility. The Daily ADX slopes at 24% indicate that the buyers have sufficient steam to drive a further rally. This could lead to a potential reach of $2500.
