Thomas Daniels
Given that technical indicators indicate the asset is in oversold territory, Ethereum’s recent price decline may be paving the way for a recovery. Ethereum’s Relative Strength Index (RSI), which has historically been a sign of a price recovery, is currently indicating oversold circumstances, according to a research paper published on February 11 by blockchain company Matrixport.
Nevertheless, market mood is still cautious in spite of these optimistic technical indicators. Since November 2024, short interest in Ethereum has increased 500%, and in the last week, it has increased by an additional 40%. As traders wager against ETH, the growing number of short positions reflects the general pessimistic attitude. However, it also makes a short squeeze more likely, which can lead to a sudden spike in price.
Curiously, Ethereum’s problems persist despite significant inflows into spot Ethereum exchange-traded funds (ETFs). Ethereum’s price is still flat and well below its all-time high of November 2021, even though $500 million is being invested in these ETFs. Long-term investors, however, such as groups like the World Financial Liberty, which has been connected to former President Donald Trump, are buying Ethereum, indicating a persistent belief in its potential for expansion.
Future testnet deployments of the Pectra upgrade in March may act as a bullish stimulus, according to Matrixport. Ethereum has a market valuation of $327.5 billion and is currently trading at $2,715.
