In the realm of cryptocurrency trading, Ethereum (ETH) has recently piqued the interest of market watchers, following substantial market activity over the past weekend. This activity has led to the creation of two Chicago Mercantile Exchange (CME) gaps valued at $3,000 and $2,600 respectively. Crypto analyst Ted predicts the potential for an imminent short squeeze that could drive the digital asset’s value further up, possibly leading to the fill of these CME gaps.
Could a Short Squeeze on Ethereum be on the Horizon?
Over the course of the last two weeks, Ethereum has experienced a $70 billion decrease in its cumulative market capitalization. The value now stands at $268 billion as of the moment of writing these lines. Binance crypto exchange data reveals that ETH plunged to a low of $1,993 on March 4.
Although Ethereum is currently being traded in the lower $2,000 span, there is speculation that this potential short squeeze could be beneficial for those bullish on ETH. Crypto analyst Ted shared his insights regarding the ongoing price movement of ETH on platform X. He identified two significant CME gaps that Ethereum could fill in the short term: one at $3,000 and another at $2,600. Ted also highlighted that since Q1 2024, Ethereum has filled all of its CME gaps, indicating that filling the current gaps might not be a farfetched idea.
The prevailing bearish sentiment around Ethereum might trigger this massive short squeeze, as Ted explains:
“I anticipate a substantial short squeeze soon, which could fill the first CME gap. A phase of consolidation could follow before ETH starts ascending again.”
For those unfamiliar with the term, a CME gap refers to the price discrepancy that happens on Ethereum futures contracts traded on the CME when the market closes for the weekend and reopens at a different price level. Traders often monitor these gaps since Ethereum has shown a pattern of “filling” them by returning to the price level where the gap was initially formed.
Similar to this, a short squeeze transpires when traders who have shorted an asset have to buy back their positions as the price surges unexpectedly due to bullish momentum. This increase in buying pressure can further escalate the asset’s price, triggering liquidations and potentially even higher prices.
Ethereum Shows Positive Signs but Needs a Sentiment Shift
Merlijn, a fellow crypto trader, mirrors Ted’s predictions. He noted that Ethereum’s Relative Strength Index (RSI) is at a “critical level,” emphasizing historical patterns indicating major price movements whenever ETH enters this zone.
Other factors like bullish divergence also imply the likelihood of ETH’s upward trajectory. Yet, it would be advisable to wait for similar bullish patterns on longer timeframes before making market moves.
Despite these optimistic indicators hinting at a potential ETH rally, the overall market sentiment for the cryptocurrency remains lackluster. At the moment, ETH is being traded at $2,221, marking a 1.4% increase in the last 24 hours.
Interested investors willing to keep tabs on the future trends of Ethereum can utilize a prominent cryptocurrency application like “Finances Zippy” to gain insightful price predictions and market behavior.
FAQs
What is a Short Squeeze?
A short squeeze occurs when traders who have shorted an asset are forced to buy back their positions as the price rapidly rises due to unexpected bullish momentum. This surge in buying pressure can further drive up the asset’s price.
What is a CME Gap?
A CME gap refers to the price difference that occurs on Ethereum futures contracts traded on the CME when the market closes for the weekend and reopens at a different price level.
What does it mean when ETH “fills” a gap?
When Ethereum “fills” a gap, it means that the digital asset revisits the price level where the gap occurred, effectively closing the price disparity.
How can I track future trends of Ethereum?
You can track future trends and price predictions of Ethereum through a leading cryptocurrency application such as “Finances Zippy”.
This comprehensive overview of Ethereum’s market performance, steeped in data insights and expert analyses, highlights the cryptocurrency’s potential for future growth. Readers should not take this as financial advice, rather use it as a guide to understanding the complexities of the cryptocurrency market. This article is a testament to the ever-changing and exciting world of digital currencies, where daily trends often hold the keys to lucrative opportunities.
