Ethereum had a massive surge on Tuesday, surging after rebounding at $2,510. It broke above $2,600 and peaked at $2,713.
A previous prediction hinted at the flip, suggesting the altcoin will retrace after breaking $2,700. This played out as the coin closed at $2,662. However, it has yet to resume its uptrend and grapples with significant selling pressure above $2.6k.
The asset is losing steam as the bullish euphoria it enjoyed expires. Investors turned bullish on Tuesday after news that a company had adopted the second-largest cryptocurrency into its treasury. SharpLink Gaming announced that it will invest $425 million into launching its Ether treasury. The firm showed its commitment to this course by nominating Ethereum co-founder Joseph Lubin to oversee it.
Every aspect of the ecosystem felt the impact of fresh liquidity inflow. Data from DefiLlama shows ETH TVL grew from $100 billion to $101 billion. DEX volume doubled, surging from $1.67 billion to $2.39 billion. Other areas, such as chain revenue and ETFs, saw similar improvements.
Exchange-traded funds were largely positive over the last three days. Nonetheless, it saw a notable inflow on Tuesday, with inflows exceeding $38 million.
A sweep through X shows that investors remain bullish amid the coin’s decline. It tested the $2,600 mark a few hours ago but rebounded. Traders are still expressing expectations of a surge above $3k. Others call for a rise to $10k, presenting the fact that the apex altcoin broke above a triangle as the reason for this conclusion.
Data from CryptoQuant shows that there is more bearish action on ETH at the time of writing. Open interest dropped by over 4% as the bulls lost massive figures in the last 24 hours. The liquidated long position exceeds $49 million, almost two times higher than the liquidated short position. The taker buy-sell ratio has since retraced below 1.
Increasing Ethereum Exchange Reserves
Data from Coinglass shows that the largest altcoin is seeing an increase in short positions. Most of the calls are around $2,700. The number of liquidations that may occur after the breakout will likely see the bears suppress any significant upside move.
Nonetheless, Ethereum is seeing a significant increase in exchange reserves. A notable increase in inflows over the last 24 hours is a contributing factor to this reading. The influx outweighs the outflows, and the bulls are struggling to soak up the excess supply.
The Funds Market Premium is currently green amid a slight price decline. However, fund holdings dropped, remaining negative over the last seven days. Conversely, fund volume spiked by over 1,444%. However, the Coinbase and Korea Premium are negative.
The one-day chart shows that Ethereum may see further declines in the coming days. ETH was overbought on Tuesday, indicating that it was due for corrections. The relative strength index is at 67, indicating that further increases may lead to the coin becoming overbought again.
Nonetheless, the average directional index is slightly on the rise. It halted its downtrend following the massive surge during the previous day. Its rise suggests that the bulls are attempting a buyback. It remains to be seen if they will succeed.
However, Ethereum may retrace to $2,500 in the coming days once the bearish dominance starts. Conversely, it eyes a return to $2,900.
