The world’s second-largest cryptocurrency Ethereum has registered a sharp bounceback over the last week. The ETH price has surged all the way past $1,500 levels with its market cap reaching closer to $200 billion.
On the weekly chart, the ETH price has gained more than 40% leading to a strong rally in the altcoin space.
However, on-chain data provider Santiment notes that the overall sentiment around ETH remains negative with the crowd having little belief in this recovery. The data provider notes:
Ethereum’s return above $1,500 for the first time since June 12th appears to be happening as the crowd has little belief in this rebound. Despite this, the average $ETH return of 30-day traders has ballooned to +28%, the highest since August, 2021.
Is ETH Profit Booking on the Cards?
The recent price rally could see some profit booking, especially for short-term traders who recently purchased ETH for around $1,000. On the other hand, the percentage of ETH supply in profit has bounced by 15% over the last week. Thus, we can’t rule out the chances of profit booking.
As data provider Glassnode explains: “Over the last month, almost 7.8% of circulating supply of $ETH has transacted on-chain, and changed hands. The total $ETH supply in profit has now increased to 56%, after hitting lows of 41% prior to the current price rally”.
Taking a look at the ETH derivatives market, funding remains low across exchanges as of now. Market analyst Alex Kruger further explains: “Quarterly futures basis is flattish and close to zero. Perp open interest since $1200 is down in Binance & Bitfinex, flat in FTX, and up in OKEX”.
This shows that one can avoid building up any fresh positions at the current price considering that ETH has already given a pretty solid run-up. Also, as per CoinShares, ETH witnessed net outflows of $2.6 million last week after three weeks of consecutive inflows suggesting some profit booking.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.