Ethereum, the second-largest cryptocurrency by market capitalization, has recently captured the attention of investors as its price experienced a notable upswing. As of now, Ethereum is trading around $2,672, a recovery from its recent lows. This has led to speculation among traders and investors alike: How soon can Ethereum cross the $2,900 mark again? While the market presents some promising signs, the path forward may not be as straightforward as it seems.

The Recent Surge: What’s Driving Ethereum’s Price Recovery?

Ethereum’s recent price rally has been one of the more significant movements in the crypto space, especially considering the broader market’s mixed performance. Over the past two days, ETH has managed to climb from its lows, gaining the attention of both retail and institutional investors. But what’s behind this recovery?

One key factor is the increasing interest from institutional investors and large-scale holders, commonly referred to as “whales.” This group has been steadily accumulating Ethereum, likely in anticipation of future price appreciation. The renewed interest comes at a time when the overall market sentiment has been somewhat subdued, with Bitcoin and other altcoins experiencing fluctuations.

However, it’s important to note that the recent gains might not be solely due to organic demand. Market analysts suggest that part of the price increase could be attributed to a liquidity hunt—a situation where prices are driven up by the liquidation of short positions rather than a strong underlying demand. This could indicate that the rally, while encouraging, may not be as sustainable as it appears on the surface.

Technical Analysis: Resistance Zones and Market Sentiment

Looking at the technical indicators, Ethereum faces some critical challenges before it can make another push toward the $2,900 level. The $2,580-$2,680 range has proven to be a significant resistance zone for Ethereum, as it has repeatedly thwarted bullish advances earlier in the year. For Ethereum to continue its upward trajectory, it is crucial for the bulls to flip this resistance zone into support.

However, current technical indicators are not entirely in favor of the bulls. The Relative Strength Index (RSI), a key momentum indicator, is sitting at 37, which signals that the market is still experiencing downward pressure. This suggests that despite the recent price gains, the overall market momentum remains weak.

Additionally, the Chaikin Money Flow (CMF) indicator, which measures capital flow into and out of the market, is currently at -0.1. This negative reading indicates that there is still a significant outflow of capital, further casting doubt on the sustainability of the recent price rally. The implication here is that the rise from the $2,100 lows may have been driven more by the liquidation of short positions rather than a strong, bullish demand for Ethereum.

Market Sentiment: A Lack of Conviction Among Speculators

Despite the recent price gains, market sentiment among speculators appears to be lukewarm at best. The Open Interest in Ethereum, which measures the total number of outstanding derivative contracts, has only seen a modest increase from $7.07 billion to $7.79 billion. This 10% increase in Open Interest is relatively small compared to the 27% price increase, suggesting that speculators are not fully convinced of a sustained bullish trend.

On a more positive note, the spot Cumulative Volume Delta (CVD) has shown a slow but steady uptrend. The CVD tracks the net buying and selling pressure in the spot market, and an upward trend generally indicates increasing buying pressure. This could be a sign that while speculators are hesitant, there is still some underlying demand that could support further price gains.

Liquidation Levels: A Closer Look at Key Price Points

Analyzing the liquidation levels provides additional insight into Ethereum’s potential price movements in the near term. According to data from Hyblock, long positions are beginning to dominate the market, with the Cumulative Liquidation Levels Delta turning increasingly positive. This is a positive sign for bulls, as it indicates that the market is seeing more aggressive buying, particularly from those betting on further price increases.

The key levels to watch are $2,791 and $2,845, as these are the largest liquidation points currently in play. If Ethereum can push past these levels, it could pave the way for a move toward $2,900. However, it’s worth noting that the delta—while positive—is not overwhelmingly so. This suggests that while further price gains are possible, the momentum may not be strong enough to sustain a push beyond the $2,900 mark without encountering significant resistance.

The Role of Vitalik Buterin’s Proposal in Ethereum’s Future

In addition to market dynamics, Ethereum’s long-term outlook is also influenced by developments within its ecosystem. Recently, Ethereum co-founder Vitalik Buterin backed a proposal to introduce multiple-block proposers in the network. This proposal is aimed at addressing the risks of centralization and potential manipulation within the Ethereum network, which are concerns that have grown as the network has scaled.

While this proposal is still in the discussion phase, its potential implementation could have significant implications for Ethereum’s network security and decentralization. A more decentralized and secure network could, in turn, bolster investor confidence and support higher prices in the long term. However, such developments are unlikely to have an immediate impact on the price, as they are more relevant to Ethereum’s long-term fundamentals.

Conclusion: Can Ethereum Reach $2.9K Again?

The question of whether Ethereum can cross the $2,900 mark again is complex, with multiple factors at play. On the one hand, the recent price gains and the positive signs in the CVD and liquidation levels suggest that there is still potential for upward movement. On the other hand, the resistance zone at $2,580-$2,680, coupled with weak momentum indicators, poses significant challenges.

Moreover, the lack of strong conviction among speculators, as evidenced by the modest increase in Open Interest, adds another layer of uncertainty. While it’s possible that Ethereum could break through the $2,900 barrier in the near term, it will likely require a combination of stronger demand, a successful flip of key resistance levels, and positive developments within the broader market.