Ethereum price is fluctuating 0.8% as the hand trades at $1,915 on Monday. The second-largest cryptocurrency battled an aggressive take-profit drive over the weekend, with ETH falling from nearly three months ago, reaching $2,015 last week.
Traders cannot ignore the overhanging danger of a pullback below the immediate support of the $1,900 Ethereum price, especially as Bitcoin’s price subtly clings to a high cliff amplified by buyer congestion at $30,000.
A small setback, but open interest is increasing
Based on live data from Coinglass, a platform for tracking the crypto derivatives market, Ethereum’s open interest is up 0.98% to USD 6.26. Traders saw $10.48 million in 24-hour liquidations, with $8.19 million in longs and $2.28 million in shorts.
In particular, the rising open interest indicates that new money is entering the Ethereum market and that there is more interest and activity in the derivatives contracts. It also implies that there is more liquidity and diversity in the market as more traders are willing to take different positions and opinions.
Therefore, if Ethereum maintains near-term support at $1,900 and open interest maintains a positive outlook, bullish momentum would build, creating a suitable environment for a breakout.
However, caution is often advised if the price of the underlying asset, in this case ETH, falls and the outstanding interest also rises. This suggests that there is a strong bearish trend and more traders are opening short positions or closing long positions.
It is a negative sign for Ethereum and could indicate further price decline.
Ethereum Derivatives Market – Coinglass
Can Ethereum Rally Withstand $2,000 Resistance?
Ethereum price is fighting for support near USD 1,900, following a rejection it encountered as it encountered the upper limit of a bearish channel. Further declines below $1,900 are highly likely as outstanding interest rises as the price struggles.
If the $1,900 support weakens and clears the way for increased selling pressure, bulls would set their sights on the support provided by the 50-day exponential moving average (EMA) (in red) at $1,869.
Traders seeking exposure to short positions would target the next area of support, as highlighted by the 100-day EMA (in blue) at $1,832, but this buyer congestion extends to $1,800.
ETH/USD daily chart – Tradingview
The Money Flow Index (IMF) adds credence to the bullish outlook as the money inflow and outflow indicator approaches oversold territory.
Most traders can choose to wait patiently for Ethereum price to confirm a trend reversal from the aforementioned support levels.
A daily close above $1,900 coupled with the subsequent move north with an eye toward $2,000 could activate FOMO, prompting investors to enter the market and bet on a bigger rise to $2,200, which would eventually may move to $3,000 as momentum builds the rally.
Two of the most essential breakout determinants are resistance at $2,000 and support at $1,900. Losing this support could hurt Ethereum’s uptrend, but breaking the USD 2,000 hurdle could be the long-awaited rally ticket to USD 3,000.
John is a renowned crypto analyst and journalist, providing expert insights into both broad and focused aspects of the digital asset market. As a steadfast reporter, he keeps his audience abreast of the latest crypto news, delving into topics such as price trends, on-chain data analytics, Non-Fungible Tokens (NFTs), Decentralized Finance (DeFi), Centralized Finance (CeFi), and the ever-evolving metaverse.
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This post Ethereum Price Momentum Builds With Increasing Open Interest, Will Bulls Rally?
was published first on https://coingape.com/ethereum-price-momentum-builds-with-climbing-open-interest-will-bulls-rally/