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Ethereum price has had difficulty breaking above the psychological $4,000 threshold since hitting a yearly high of $4,093 on December 6.
Yet investors have continued to accumulate the leading altcoin despite broader market consolidation. This increases the probability of the price surpassing $4,000 in the short term. This analysis explains why.
Ethereum Buy Orders Soar
Market participants’ buy-sell ratio for Ethereum jumped to a monthly high of 1,033, indicating an explosion of buying orders in the coin’s derivatives market.
This index provides insight into an asset’s market sentiment and potential price direction by comparing the volume of buy orders placed by market participants with the volume of sell orders placed .
A ratio greater than 1 suggests bullish sentiment, as buyers are willing to pay the asking price, reflecting increased demand for the asset. That means stronger buying pressure, which could be a sign of a bullish price trend in the underlying asset.
Notably, the coin’s positive funding rate supports this bullish outlook. At this time, the aggregate funding rate of ETH across crypto exchanges stands at 0.011%.
A funding rate is a periodic payment between traders in a perpetual futures contract that aligns the contract price with the spot price of the underlying asset. A positive funding ratio shows that long-term traders are paying short-term traders, indicating higher demand for long positions. This often signals bullish sentiment in the market, as traders are willing to pay a premium to maintain long-term positions.
ETH Price Prediction: Bulls’ Rising Power
On the daily chart, ETH’s balanced cumulative volume is increasing, confirming the coin’s sustained accumulation. At the time of writing, the momentum indicator stood at 26.06 million.
This indicator uses volume flow to predict price changes of an asset. When an asset’s OBV volume increases, it implies strong buying pressure, indicating that the volume is primarily driven by buyers, which is often a positive sign for potential upside.
If ETH buyers get control of the situation, they can push the price above $4,000 towards $4,093, the highest level of the year. However, if the current trend reverses, ETH price could drop to $3,673, invalidating the bullish theory.
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