Ethereum recovery points to possible stabilization after recent market correction

Since the end of last week, the cryptocurrency market has shown a slow trend with most major assets fluctuating sideways. However, the second-largest cryptocurrency by market capitalization, Ethereum, has maintained a better position amid the development of Spot ETFs. After the recent market correction, the price of Ether has established a flat support at $2,815, providing buyers with an opportunity for a counterattack. But will the current market dynamism support this rally? Since the end of last week, the Cryptocurrencies are a slow trend with most major assets fluctuating sideways. However, the second largest cryptocurrency by market capitalization, Ethereum, has maintained a better position amid the development of Spot ETFs. After the recent market correction, the Ether price created a flat support at $2,815, providing buyers with an opportunity for a counterattack. But will the current market dynamism support this rally?

The price of Ethereum has been under an active correction trend since the end of May. From a peak of $3,974, the altcoin fell 29.27% before finding proper support at $2,815. The horizontal level closely coincides with the 23.6% Fibonacci retracement levels and a 50W moving average that creates a strong accumulation zone for investors.

This week’s bullish rally lifted the asset 10.3% to trade at $3,116, while market capitalization jumped to $373.9 billion. This recovery likely followed the recent update of the S-1 registration statement by Ethereum’s ETF issuers, along with market speculation that this instrument will start trading by mid-July.

Moreover, the Ether coin saw a significant drop in open interest during the sell-off in early July. According to Coinglass data, Ethereum’s open interest fell from $14.98 billion to a low of $11.97 billion, representing a 20% decline.

Ethereum Resistance at $3200: Challenges and Opportunities in Crypto Markets

Recently, data on the chain indicated that Ethereum, the second largest cryptocurrency by market capitalization, faces massive resistance at the $3,200 level. This resistance level is crucial as it represents a significant psychological barrier for market participants, many of whom are considering liquidating their positions as the price approaches this threshold.

About 2 million titles that previously acquired Ethereum at a price of about $3,200 now hold their investments at a loss. As the price approaches this breakeven point, these holders may choose to sell their assets to avoid further losses, thereby increasing the selling pressure on Ethereum.

This potential wave of sell-off underscores a pivotal moment for Ethereum, as the build-up of selling pressure can significantly affect price movements. The market’s response to these selling pressures is something that investors are watching closely.

Despite the potential for a looming sell-off, the bright side could help absorb selling pressures: the expected launch of the Ethereum Trading Fund (ETF). The ETF offering is expected to attract significant institutional investments, which can balance the negative price action caused by selling pressures.

The possible approval of the European Training Foundation has already begun to arouse positive emotions among investors. The capital inflow associated with such a financial product can push the price of Ethereum higher, offsetting selling pressures and potentially leading to an upward price trajectory.

At the moment, Ethereum is experiencing volatile market dynamics. As of the last update, ETH is trading at $3,100.56, reflecting a 0.20% decrease in value. The intraday trading range is between USD$3,025.51 at the low and USD$3,129.02 at the high, highlighting the asset’s volatility.

Coinglass data also confirms this turmoil, suggesting that open interest in Ethereum futures rose 0.51% to $12.67 billion. Conversely, the volume of Ethereum derivatives fell 30.71% to $21.15 billion, suggesting mixed sentiment among investors regarding Ethereum’s short-term prospects.

Ethereum’s Special Notes: Improvements and Securing the Fundamentals of Decentralized Trading

Ethereum (ETH) shows a larger share of specially designed blocks, where transactions are specifically selected. The practice of reordering transactions has affected multiple networks, especially Solana. There is also data about Bitcoin having its own form of initial transactions. The emergence of ordinal codes and Bitcoin-based tokens Indicates the appearance of tools to pre-run or block transactions, which can also create private memo sets.

The trend of Ethereum’s own notes accelerated with the bull market of 2024 and the return to decentralized trading. The peak of the sandwich attacks came in 2021, when DEX trading was still relatively new. Now, there are more tools to ensure the correct order of transactions and prevent losses.

The benign interpretation of these memos is the improvements and tools to save fees. In early July, so-called private transactions, or specially selected blocks, accounted for up to 30% of total Ethereum traffic.

Although transaction picking may be critical for some applications, this undermines the basic understanding of public blockchain technology. In addition, Ethereum’s gas economy relies on free competition based on priority fees. In the current case, the culprit may be DEX and a new technology for smart transactions to avoid congestion.

The existence of private memo sets and block creators causes concerns that previously the free network had to rely on trusted centralized entities. Block creators are those special entities that order transactions to avoid attacks, as well as improve gas.

On the plus side, the ability to create transactions in blocks may be applicable for high-traffic applications that have nothing to do with trading.

Another benefit of private transactions is that they may be a way to prevent medium electric vehicle (MEV) attacks and export trade. Transactions in specially composed blocks can actually avoid scrutiny by robots, solving the standout problem in DEX trading.

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