Ethereum (ETH-USD) is gearing up for a potential rocket-like rebound, with signs pointing toward a $3K target. This upswing is fueled by a combination of positive technical indicators and shifting market sentiment, suggesting that Ether could soon blast off from its recent lows.
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According to Joel Kruger, a strategist at LMAX, the crypto’s momentum is picking up with “many medium and longer-term players stepping in to take advantage of the recent dip.” This sentiment is echoed by a report from 10x Research, which highlights upcoming catalysts like next month’s Pectra upgrade and potentially favorable U.S. inflation data that could fuel Ether’s ascent.
Technical and Economic Catalysts Align
Ether’s technical indicators are flashing signs of a turnaround; the relative strength index (RSI) has dipped to near 35%, historically a precursor to a rebound, 10x Research noted. The crypto community is also eyeing Wednesday’s U.S. CPI inflation report, which, if aligned with forecasts, could bolster market sentiment further, pushing ETH prices higher.
As Ether battles with a key resistance level at around $2,650, breaking through could pave the way for a climb to the next major resistance at $3,000. This would represent a significant gain from current levels, offering a potential 13% increase in value. The broader altcoin market’s dynamics also play a role, with Ether shedding 20% of its value over the past month amid a wider market downturn.
Challenges Remain amidst Hedge Fund Bets
Despite the optimistic technical outlook, Ether faces challenges from hedge funds ramping up their short positions as they bet against the crypto’s recovery. The increase in shorts, up over 500% since the U.S. presidential election, suggests a cautious or bearish outlook from some market participants. This setup could lead to a “short squeeze,” where a rapid price rise could force short sellers to buy back Ether, potentially driving prices even higher.
At the time of writing, ETH is sitting at $2,619.10.
