In a notable display of strength, Ethereum (ETH) has successfully surpassed the crucial $3,000 milestone, a level last tested almost two years ago on April 26, 2022. This achievement is particularly significant as Bitcoin (BTC) has shown indications of a potential decline, highlighting Ethereum’s ability to sidestep Bitcoin’s cues. The market is now buzzing with speculation on the onset of another alt season.
ETH‘s surge to $3,000 occurred a day after the Proof-of-Stake (PoS) token outperformed BTC, showcasing double-digit weekly gains and a notable spike in Open Interest. However, in the past 24 hours, Ethereum’s price has experienced a 0.78% dip, resulting in the liquidation of approximately $15.47 million in short positions against $20 million in long positions. This discrepancy suggests that while many traders anticipated the upward movement in Ethereum price and took long positions, their take profits were set higher, leading to the closure of these positions as their margin accounts could no longer support them.
The current scenario portrays Ethereum as an overbought asset, as indicated by the Relative Strength Index (RSI) surpassing 70. Traders considering new long positions are advised to exercise caution, as the ETH market is at high risk of experiencing a pullback.
A potential buying opportunity may arise around the $2,689 support level, presenting a 10% decline from current levels. In a more severe scenario, Ethereum’s price might slip below this level, testing the critical support at $2,500 or finding support at $2,388.
On the optimistic side, if Ethereum bulls exhibit strength, the price could reclaim the $3,000 milestone and even surpass the $3,004 range high. A decisive candlestick close above this local top on the daily timeframe would invalidate the bearish outlook.
Speculation is also rife regarding the possibility of an alt season, with Ethereum’s robust performance against Bitcoin’s consolidation fueling these expectations. An alt season, characterized by superior returns on altcoins compared to Bitcoin or Ethereum, could lead to a decline in Bitcoin’s market dominance while boosting that of altcoins. The alt season indicator from BlockchainCenter is aligning with the potential for an altcoin season rather than a Bitcoin season, adding to the anticipation within the cryptocurrency market.
