- Ethereum is gaining bullish momentum as it approaches a breakout from a flag pattern, with price targets near $3,600 and possibly $4,000.
- Surging open interest and liquidations of short positions in the derivatives market highlight growing investor confidence.
Ethereum Builds Momentum Amid Bullish Breakout Signs
Ethereum is heating up as it eyes a breakout from a bullish flag pattern, riding a 3.8% daily surge that has traders buzzing. With open interest in derivatives markets hitting record highs, Ethereum is showing signs it could rally as high as $3,600—possibly even touching the psychological $4,000 mark in the near term.
While Bitcoin hovers near the $110,000 threshold, Ethereum has stolen the spotlight with its recent outperformance. On Tuesday, ETH posted a strong bullish candle, closing near the $2,700 resistance level, a critical zone in the ongoing consolidation between the 38.20% and 50% Fibonacci retracement levels.
Chart Patterns Suggest a Breakout Is Brewing
Ethereum currently trades around $2,638, experiencing a minor dip of less than 1%, but maintaining upward momentum. The convergence of the 50-day and 100-day exponential moving averages (EMAs) further supports a potential bullish crossover, signaling increasing strength in the trend.
Although the Relative Strength Index (RSI) has pulled back slightly from overbought levels, it still reflects underlying bullish sentiment. If ETH breaks out above the flag pattern, traders could expect a 33% rally toward $3,577, surpassing the 78.60% Fibonacci level at $3,436.
A sustained rally could even bring the 100% Fibonacci target of $4,000 within reach. On the flip side, the $2,400 support and 100-day EMA at $2,259 serve as key downside safety nets.
Derivatives Data Paint a Bullish Picture
Ethereum rally is being reinforced by explosive activity in the derivatives market. Coinglass data shows open interest has surged 7.4% to an all-time high of $35.48 billion, while trading volume jumped nearly 40% to $79.51 billion.
Options markets are seeing similar excitement, with volume spiking 64% to $1.10 billion and open interest rising to $8.58 billion. A funding rate of 0.0068% and a long-to-short ratio of 1.02 indicate strong bullish bias among traders.
What’s more, the liquidation data shows bears are getting crushed—$45.16 million in shorts were liquidated over the past 24 hours, compared to just $24 million in longs.
Ethereum Bulls Gearing Up for a Breakout Run
With technical indicators aligning and bullish sentiment exploding in derivatives markets, Ethereum appears poised for a powerful breakout. If it clears key resistance levels, the $3,600 and even $4,000 targets could come into play sooner than expected.
