Ethereum (ETH) has been on a downward trajectory since mid-July, dropping over 23% to its current level of around $2,679. However, there are signs that this correction may be nearing its end, according to on-chain analyst Burak Kesmeci.
Two key indicators are pointing to a potential reversal for Ether: the Taker Buy Sell Ratio and Open Interest (OI). The Taker Buy Sell Ratio, which measures the balance between buyers and sellers on exchanges, has recently turned positive, suggesting increased buying pressure. Additionally, OI, the total number of outstanding options contracts, has seen a notable uptick, indicating growing investor interest.
Historically, a surge in OI has preceded market corrections. Ether’s OI spiked before its previous pullbacks, confirming Kesmeci’s observation that the recent drop was likely to occur. While the current OI is still below previous peaks, its upward trend is a positive sign for bulls.
The analyst believes that for a significant price increase, leveraged traders will need to re-enter the market. Typically, these traders become more active as asset prices rise, amplifying price movements.
Also Read: Is Ethereum Losing Its Edge? DApp Activity Down 33%, Casting Doubt on Price Recovery
It’s worth noting that the launch of Ether-based exchange-traded funds (ETFs) in July, while initially anticipated to boost the price, has had the opposite effect. Net outflows from these ETFs have created additional selling pressure, contributing to Ether’s decline.
While the situation remains fluid, the combination of on-chain data and market dynamics suggests that Ether may be in the late stages of its correction. Investors will be watching closely to see if these positive indicators translate into a sustained price recovery.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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