The Ethereum price is gearing up for a parabolic rally as technical indicators and on-chain data suggest that the leading smart contract coin is preparing for a trend toward the $4,500 level.
Ether’s price has been performing well over the past few weeks, finally hitting a 6-month high of $3,687 today after gaining over 3% in value in the last 24 hours.
As of the latest update, Ethereum’s (ETH) price has decreased slightly to $3,560, albeit with a 10% rise in its trading volume over the last 24 hours, now at $42.12 billion.
ETH to USD | TradingView
Why Ethereum price could surge above $4,500 soon
There are many reasons why the ETH price increase is just beginning. First, technical indicators suggest that Ethereum (ETH) displays strong bullish momentum. The moving averages heavily favor buying, with all short-, medium-, and long-term signals pointing towards upward movement.
On the other hand, oscillators provide a more cautious outlook. Metrics such as the RSI and Stochastic %K are approaching overbought territory, suggesting that Ether may see some resistance before climbing higher.
If the buying pressure persists, however, ETH prices can test higher price levels. A breakout through resistance areas near $3,700-$4,000 could pave the way for ETH to target $4,500. However, traders should be alert for indications of weakening momentum, as minor pullbacks might happen before ETH gains the strength to approach $4.5K.
Furthermore, Ash Crypto, a crypto trader with over 1.3 million followers on X, shared a looming liquidation in the Ethereum futures market. He noted that there are currently $835 million in short positions on ETH.
🚨 LIQUIDATION ALERT 🚨
— Ash Crypto (@Ashcryptoreal) November 28, 2024
$835,000,000 WORTH OF $ETH
SHORTS WILL GET LIQUIDATED IF
ETH HITS $4,000.
SHORT SQUEEZE IS COMING 🔥 pic.twitter.com/2q8JYDwmaA
If the price of Ethereum reaches $4,000, these short positions could be liquidated, forcing traders to exit their positions at a loss. According to him, this situation could trigger a “short squeeze,” where the demand from short sellers buying back Ethereum to limit their losses could drive the price up sharply.
Another reason the Ethereum price might soon see a bullish trend toward the $4,500 price point is the recent popularity and growth of Layer 2 (L2) scaling networks in the Ethereum ecosystem.
L2Beat data shows that the total value locked (TVL) on Ethereum layer-2 networks has surpassed $51.58 billion for the first time. The list shows Arbitrum One, Base, Op Mainnet, Blast, and ZkSynk Era, topping the list with the most significant share.
Read more: Ethereum Price Prediction: ETH Could Surge to $10k, Analyst Says
