Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
Ethereum is already showing the first signs of recovery. Since its recent low near $1,840, Ethereum has risen by about 4%, indicating that buyers are starting to return to the market. This jump is not accidental. The rebound setup has been quietly forming for weeks.
Several key signs now point to a change. Selling pressure fell sharply. Derivatives traders have turned to negative trends aggressively without adding new positions. Meanwhile, long-term holders are starting to buy again after weeks of selling. Together, these forces suggest that Ethereum’s current rebound may extend even further.
Ethereum bounce setup appears as a bullish fork
You see Ethereum short term chart Symmetrical triangle. This pattern reflects indecision, as buyers and sellers struggle for control.
At the same time, a bullish divergence has appeared between the price and the Relative Strength Index (RSI). The RSI is a momentum indicator that measures whether selling pressure is improving or weakening. Between the beginning of February and today (February 23), the price of Ethereum made new lows, but the RSI made new lows. This pattern often indicates that the selling pressure is removed.
Want more icon insights like these? Subscribe to publisher Harsh Notaria’s Crypto newsletter here.
The same signal worked recently. Between February 3 and February 13, a similar deviation resulted in a retracement of nearly 10%. Another deviation between February 3 and February 15 resulted in a 6% increase.
Ethereum has already started responding again. The latest rebound of 4% shows buyers reacting to the weakening of the downward momentum. But technical signals alone are not enough. The bigger question is what has changed beneath the surface.
Selling pressure drops by 90% even when the price drops, revealing another catalyst
The most important change comes from exchange flows. Exchange flow measures the number of currencies moving on exchanges. When currencies move on exchanges, this usually indicates an intention to sell.
On February 7, Ethereum exchange flows reached close to 1.06 million Ethereum. Since then, flows have dropped to just 126,000 ETH. This represents an almost 90% reduction in potential sales pressure.
This change becomes even more significant when compared to the price. During the same period, the price of Ethereum fell by about 14%. Usually, the price goes down when the selling pressure increases. But here, the price fell as the selling pressure disappeared.
This indicates that the decline was not driven by aggressive spot sales. Instead, it indicates that the weakness came from another source. This source appears to be derivatives traders. Ethereum’s funding rate has become extremely negative. When funding is negative, short sellers pay to keep bearish positions in position.
Since February 7th, funding rates have fallen from slightly positive levels to around -0.02%. This represents one of the most negative fluctuations in recent weeks.
However, open interest tells a different story. Open interest measures the total value of active futures positions. During this period, open interest remained largely flat, decreasing only slightly from about $9.06 billion to $8.88 billion.
This combination is important. This shows that new short positions are not entered aggressively. Instead, existing traders have become negative, and long positions are likely to exit.
This type of configuration can be unstable. When bearish sentiment grows without large new positions, the market becomes vulnerable to a short squeeze. A short squeeze occurs when rising prices force sellers to close positions, pushing the price higher.
This explains why Ethereum’s rebound may extend beyond just a short-term bounce.
Long-term holders immediately turn into buyers weeks after the sale
Another important change comes from long-term rights holders. Hodler’s measure of change in net positions measures whether long-term investors are buying or selling.
Between February 3 and February 20, this measure was negative. This has been demonstrated by continued sales by experienced investors. At its peak, long holders sold more than 41,000 shares on a net basis. But this trend is now reversed. Over the past two days, the metric has turned positive, with a net accumulation of more than 6,000 ETH.
This confirms that experienced investors have resumed buying. This type of accumulation often occurs near the local bottom, When long-term investors place initial positions before the broader recovery begins.
With selling pressure waning, bearish derivatives sentiment deteriorating, and long-term buyers returning, the Ethereum rebound system now has stronger structural support.
The price of Ethereum is facing key breakout levels that can continue to bounce
Ethereum is now facing several important resistance levels. The first level of the key is $1,920. Passing this level will confirm the enhanced momentum. The next resistance appears at $2,020, followed by a major barrier near $2,060, which is a key technical level, where it could face more resistance.
If Ethereum crosses $2,060, the rebound may accelerate towards $2,200 and maybe even $2,420.
However, a bullish setup depends on holding the support. The critical bearish level remains $1,840. If Ethereum falls below this level, the bounce structure will fail in the market. In this case, the next downside target is near $1,740.
At the moment, no It is an Ethereum leap Just a simple explosion. Sales pressure has dropped by almost 90%. The negative feeling increased without a strong conviction. The new owners quietly returned as buyers.
These combined forces suggest that Ethereum’s current rebound may be the first stage of a larger movement – ​​with the next level of discovery becoming the crucial catalyst.
