Ethereum has been consolidating in a tight price range for several months, trading between $3,200 and $3,500. Despite the recent upward movement of the broader market, ETH is still struggling break out of this area.
This stagnation comes after a long decline from the all-time high of $4,800, which was recorded at the end of 2021. The digital currency is now down about 32% from this peak.
Notably, even the appointment of the new pro-crypto administration and a new sense of regulatory clarity have done little to move Ethereum beyond its current resistance levels.
Among these market conditions, ShayanBTC, which contributed to the QuickTake CryptoQuant platform, is on marked critical metric that could indicate an upcoming price move for ETH.
Elevated leverage levels in Ethereum and its implications
According to Shayan in a recent analysis uploaded on the CryptoQuant QuickTake platform, the estimated Leverage Ratio of Ethereum – a measure of the average leverage that market participants will have in the future – is climbing steadily so far.
This increase as reported by Shayan shows a greater willingness among traders to take risks, even as the price of Ethereum is still involved in consolidation. With leverage at high levels, the stage could be set for a major price move, although its direction remains uncertain. Shayan noted:
The breakout from this range, driven by the high-leverage environment, is expected to trigger a large and critical price move.
Shayan explained that as more traders take higher leverage, the market will become larger prone to sharp price movements. This is because if these lever positions are melted – either through a short or long press – it could suddenly move and significant price change.
The continued consolidation around $3,200 – $3,500 has increased interest in what lies ahead for Ethereum. CryptoQuant analyst wrote:
Given the current market sentiment, a bullish breakout seems more likely. However, traders should keep a close eye on the leverage ratio, as any sudden change could lead to unexpected volatility and liquidation.
ETH Market Performance
At the time of writing, ETH is trading at $3,282, down 0.1% in the last 24 hours. Interestingly, despite this unnecessary performance from ETH, the daily trading volume of the asset in the past week has been very positive.
Last Wednesday, ETH's trading volume was below $20 billion, but as of today, Ethereum's daily trading volume is soaring above $24 billion. This is very against movement especially when compared to the performance of the ETH market over the same period.
According to Javon Marks, a renowned crypto analyst on X, Ethereum seems to be on the verge of a major rally to $12,000 due to a similar performance of the Fib Level as it did in the previous bull cycle.
ETH (Ethereum), with a similar performance to the 1.618 Fib Level as it did in the previous bull cycle, could be set for an increase of almost +240% from here to $11,865.6 levels!
Figure 5 ETH may be on the way and developing now and this will help many Altcoins to main run
. pic.twitter.com/eJT1Fu986b
– JAVON
Mark (@JavonTM1) December 29, 2024
Featured image created by DALL-E, Chart from TradingView
