ETH Faces $3,500 Hurdle: Analysts Anticipate Imminent Correction

Ethereum recently achieved a milestone by surpassing the $3,500 mark, a feat unseen since 2021. This surge is attributed to various factors, including the upward trajectory of Bitcoin, increased funding rates, and a growing demand in the U.S., particularly on Coinbase, as previously highlighted on ETHNews.

However, amidst this positive momentum, there’s a simultaneous uptick in bullish leveraged positions and bearish on-chain metrics, signaling the potential for a near-term correction.

The cryptocurrency market is witnessing a wave of liquidations, totaling over $750 million, with nearly $120 million tied to Ethereum alone. This significant liquidation underscores the heightened volatility and associated risks, emphasizing the peril of excessive optimism prevailing in the market. The cost of maintaining bullish leveraged positions has risen, exacerbated by a drop in ETH prices to $3,200, posing a challenge to the sustainability of these positions.

Furthermore, the current funding rate of ETH raises concerns about long-term viability, as the exit of short-term holders contributes to mounting selling pressure. Despite encountering resistance at the $3,500 level and signals of a potential correction, Ethereum has displayed resilience, maintaining a position above the 20-day exponential moving average, offering a glimmer of hope.

Investors are advised to exercise caution, striking a balance between optimism and vigilant market awareness, as Ethereum navigates these uncertain waters toward potentially uncharted territory. As of the latest update, Ethereum (ETH) is intriguingly positioned at $3481.06 USD, reflecting a recent increase of $23.2 or 0.66% in the past few hours.