Ethereum’s intense uptrend seen throughout the month of February has stalled after the crypto faced a firm rejection at $290, which subsequently sparked a retrace that led ETH down to lows of $240, where it was able to find some notable support.
Despite being able to climb from these lows, the crypto’s parabolic rally has turned into a bout of sideways trading, and this is leading the number of short positions on ETH to skyrocket.
Importantly, one top trader is now noting that these short positions could provide fuel for bulls, potentially fanning the flames that evoke the next major uptrend.
Ethereum Stable Around $280 as Bitcoin’s Uptrend Slows Down
Because Bitcoin has now entered a short-term consolidation phase as it hovers around $10,200, Ethereum’s rally has also shown signs of slowing down.
In the near-term, it does appear that if ETH wants to begin climbing from its current price of $279, it is imperative that Bitcoin also begins ascending.
Alex Krüger, an economist who focuses primarily on cryptocurrencies, spoke about Ethereum in a recent tweet, explaining that its average trading volume over the past week has been four times higher than that seen in the second half of 2019, suggesting that investors are heavily accumulating the crypto.
“The average ETH trading volume during the past week has been 4 times larger than the average volume for the second half of 2019. Somebody has been buying a lot of ETH,” he said.
— Alex Krüger (@krugermacro) February 18, 2020
ETH Short Positions Skyrocket; Here’s Why That’s Good for Bulls
Another bull-favoring factor that should be considered is the fact that short positions on ETH have been climbing, which could provide fuel for the next uptrend.
Bagsy, a popular cryptocurrency trader and analyst, spoke about this in a recent tweet, pointing to a chart showing the rise of short positions on Ethereum.
“ETH USD: Shorts climbing while longs are dropping on this recent leg up. More fuel for the fire?”
Shorts climbing while longs are dropping on this recent leg up. More fuel for the fire? pic.twitter.com/gyOl9kaazM
— Bagsy (@imBagsy) February 19, 2020
In order for these shorts to truly help propel ETH higher, it is imperative that bulls are able to generate enough buying pressure to send it high enough to start liquidating these positions.
If bulls are able to garner this momentum, these shorts could help Ethereum set fresh 2020 highs.
Featured image from Shutterstock.