- Ethereum is gearing up for a bullish breakout toward $3,600, supported by strong technical signals and record-high derivatives open interest.
- Rising trading volumes and a positive funding rate indicate growing investor confidence in further price gains.
Ethereum is on the verge of a significant bullish breakout, with its price rallying 3.8% and eyeing the $3,600 mark. As Bitcoin flirts with the $110,000 level, Ethereum’s recent surge highlights growing investor optimism fueled by strong technical signals and robust derivatives activity.
Technical Setups Signal Upside Potential
On the daily chart, Ethereum has been consolidating between key Fibonacci retracement levels—holding support at the 38.2% level near $2,400 while testing resistance at the 50% level around $2,700. This sideways movement is forming a classic bullish flag pattern, which typically signals continuation of an upward trend.
Ethereum’s recent 3.8% jump formed a strong bullish candle near resistance, boosting hopes for a breakout. At the time of writing, ETH trades around $2,638 with only a minor pullback, maintaining strong bullish momentum. Supporting this, the 50-day and 100-day exponential moving averages (EMA) are close to a positive crossover, often a precursor to further gains.
While the Relative Strength Index (RSI) hovers just below overbought territory, it remains supportive of upward momentum. Should the flag pattern break out, Ethereum could see a rally of approximately 33%, pushing prices toward $3,577 and potentially surpassing the 78.6% Fibonacci retracement level at $3,436. Optimistically, the path to $4,000 remains plausible if bullish momentum continues.
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Derivatives Market Strengthens Bullish Case
Backing the technical picture, Ethereum’s derivatives market shows signs of strong optimism. Open interest has hit a new all-time high of $35.48 billion, reflecting increased trader participation. Trading volume surged nearly 40% to $79.51 billion, with options volume jumping an impressive 64% to $1.10 billion.
Notably, the funding rate has risen to 0.0068%, indicating that long positions are paying premiums and suggesting bullish sentiment. The long-to-short ratio above 1.02% further confirms that bulls are gaining control. Additionally, liquidations over the past 24 hours reveal heavier losses among short sellers, with $45.16 million in short liquidations compared to $24 million on the long side—another bullish sign.
What’s Next for Ethereum?
All signs point to a potential breakout from the flag pattern that could drive Ethereum toward $3,600 and beyond. However, traders should keep an eye on critical support levels around $2,400 and the 100-day EMA near $2,259 to gauge downside risk.
With both technical momentum and derivatives data painting a bullish picture, Ethereum looks poised for a strong move upward—making the weeks ahead crucial for investors and traders eyeing one of crypto’s top performers.
