Ethereum surged 3.8%, approaching a bullish flag breakout with a target of nearly $3,600. Derivative data shows a growing number of open interest and an increasing bullish momentum.
As Bitcoin approaches $110,000 again, Ethereum outperforms with a 3% surge, approaching a potential flag breakout. Will this rally push Ethereum towards $3,600?
Ethereum price analysis
On the daily chart, Ethereum shows a lateral trend between two important Fibonacci levels. A 38.20% Fibonacci level, close to $2,400, serves as a support, while a level of about $2,700 serves as an upper resistance.
Ethereum formed a bullish candle near upper resistance levels as prices rose 3.81% on Tuesday. This development will increase the chances of breakout rally as the broader market recovers.
Currently, Ethereum is trading at $2,638, trading at a minor pullback of less than 1% while maintaining bullish momentum. Supporting the possibility of breakouts, the 50-day and 100-day EMA lines are on the brink of positive crossovers.
However, the daily RSI line hovered just below the over-purchased threshold, indicating a slight loss of momentum boosted from the territory of over-acquisition. Still, the indicator remains positive and supports upward breakout cases.
As Ethereum approaches a flag breakout, this pattern suggests a potential 33% gathering will be $3,577. This bullish move could exceed the 78.60% Fibonacci level at $3,436.
Optimistically, this opens the door to reach 100% Fibonacci levels near the psychological $4,000 mark. On the downside, critical support remains at a Fibonacci level of 38.20%, with a 100-day EMA of $2,259.
ETH derivatives surge with strong optimism
The recent surge has led to a significant increase in bullish sentiment in the Ethereum derivatives market. According to Coinglas, ETH’s open interest rose 7.4% to $35.4 billion, the newest ever, but trading volume rose nearly 40% to $795.1 billion.
In particular, there was a significant increase in the options market, with volume increasing by 64% to $11 billion. Meanwhile, open interest on options was $8.58 billion, up 3.79%.
As trading activity intensifies, the growing bullish sentiment is evident in the rising funding rate, reaching 0.0068%. Furthermore, the short-term ratio is above 1.02%, indicating a change in favor of bulls.
Interestingly, the 24-hour liquidation shows a larger wipeout of the bearish position, with the short liquidation totaling $45.16 million, comparing it to a liquidation of nearly $24 million.
