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Ether (ETH) experienced a significant price surge on May 20th, climbing over 5% to reach $2,520. This upward trend mirrored a broader recovery across the cryptocurrency market, with Bitcoin (BTC) rising 2% to surpass $105,000 and other major altcoins also showing gains. The total cryptocurrency market cap increased by 2.2%, reaching $3.33 trillion. This positive market sentiment persisted despite Moody’s downgrade of the US credit score, which negatively impacted equities and gold. However, cryptocurrencies demonstrated resilience, with Bitcoin even reaching a high of $107,000 on May 18th.
Ether’s price increase was fueled by several key factors. A substantial short squeeze, liquidating over $57.2 million worth of short ETH positions in 24 hours, contributed significantly to the upward pressure. Since May 8th, approximately $913 million in short liquidations have been recorded, coinciding with a 40% price rise. Simultaneously, Ether’s open interest (OI) reached an all-time high of 20.1 million ETH, indicating increased trading activity and bullish sentiment among futures traders. Positive funding rates further reinforced this bullish bias.
Technically, Ether’s price action displays a V-shaped recovery pattern on the weekly chart, suggesting a potential continuation of the upward trend. The current price sits below a key supply-demand zone between $2,600 and $2,800. A break above this zone could propel the price towards the neckline at $4,100, potentially leading to a rally toward the 2021 all-time high of $4,800—a 92% increase from the current price. The relative strength index (RSI) also supports this bullish outlook, having risen to 52 from near oversold conditions. Prominent analysts like Michaell van de Poppe have even suggested the possibility of a move towards $4,000.
This analysis does not constitute investment advice. Cryptocurrency markets are inherently volatile, and all investment decisions should be based on thorough research and consideration of individual risk tolerance.
