Ethereum (ETH) is in a critical phase as the price action, derivatives data, and on-chain indicators are starting to converge. ETH is trading just under $2,285.70 with a 1.73% decline in the last 24 hours and has been on a slight upward trend recently, but the underlying indicators suggest that there is accumulation beneath the surface.

Derivatives Data Signals Silent Accumulation

The OI-weighted funding rate of ETH has been fluctuating between positive and negative. Recently, there have been long periods of negative funding rates despite a stable price, a crucial indicator for investors.

The negative funding rates typically reflect the presence of short positions in the market, but Ethereum has not declined by a large margin. This generates a bullish divergence, which implies that selling pressure is being absorbed by stronger investors. Traditionally, these conditions are usually followed by upward price expansions, which are usually caused by short squeezes.

Simultaneously, the taker buy/sell ratio moved above 1.03, which indicates demand growth, as buy orders are exceeding the sell orders. 

On-Chain Activity Shows Stabilization

On-chain data is also beginning to show early signs of stabilization. The active addresses and network growth are no longer falling but are instead moving sideways. This suggests the market is leaving a weak stage behind.

This stabilization is an indication that the weaker players are slowly leaving the market and long-term holders are accumulating. Consequently, there is weakened downside pressure, and a solid base is being formed, although not yet fully reflected by the price.

Technical Structure

ETH price is trading near $2,280 on Monday after surging over 3% in the last week. ETH’s price stays above the 50-day EMA at $2,210 and has broken above the horizontal channel top near $2,147.05

The RSI stands at 55.32 on the daily chart, which hints at constructive momentum, while the MACD remains slightly positive above the zero line.

On the downside, immediate support coincides with the breakout zone between the 50-day EMA at $2,210 and the channel boundary at $2,148, ahead of the 23.6% Fibonacci retracement at $2,138; a break below this zone would expose the $1,747 level. 

On the upside, immediate resistance is seen at the 100-day EMA at $2,353, followed by the 38.2% retracement at $2,380, while the 200-day EMA is at $2,641.

Also Read: Ethereum Breakout: Is Altcoin Season About to Begin?

Conclusion

Ethereum is at the build-up stage as indicators suggest a possible breakout. Increasing buy-side pressure, leveling on-chain activity, and a robust support base indicate that the market is slowly building strength.

As long as Ethereum reclaims $2,600 and continues its upward trend, the shift towards $3,000 becomes optimistic.