A CryptoQuant analyst says Ether (ETH) could experience a rally soon, as shown by metrics in the cryptocurrency’s futures market.

According to a post by the analyst, Shayan, ETH has just witnessed a significant liquidation event, and historically, such occurrences are often followed by price rallies as markets stabilize and spot buying pressure dominates.

ETH Could Rebound Soon

Earlier this month, ETH price took a downward trajectory, causing the crypto asset to lose almost 34% of its value. According to CoinGecko data, ether tumbled from $3,329 to $2,197.

The dip stirred investor speculation on whether the cryptocurrency would plummet further; however, significant buying activity near the $2,100 region caused the asset to rebound slightly to the $2,500 level, where it hovers. At the time of writing, ETH was changing hands at $2,623, down 2.3% in the past 24 hours.

Although ether has recorded some recovery, futures market data suggest the asset may see a more significant rally. The recent decline triggered a massive liquidation of long perpetual positions, hitting a level last seen in November 2022. Shayan said the liquidation indicates that the futures market is cooling and many leveraged positions have been flushed out. Such development and rising spot buying pressure can enable renewed interest in the market.

“With the futures market potentially reset, if demand returns, Ethereum could be poised for another impulsive bullish surge in the longer term. The cooling of the futures market may attract new buyers and stabilize the market, leading to a potential recovery from the recent downturn,” Shayan added.

ETH Price Outlook

While Shayan’s analysis suggests a bullish reversal for ETH, the asset’s daily and hourly charts may indicate the opposite.

Ether has a substantial bullish response near the critical $2,100 support level and robust demand around $2,000, reflecting investor interest and confidence in its long-term potential. Still, the asset is facing resistance at the $2,800 threshold. This resistance level includes the previously broken lower boundary of the wedge during Ether’s plunge days ago.

A recent analysis published on CryptoPotato revealed that as ETH continues to regain momentum, the $2,800 level could hinder the upward momentum and trigger a reversal to the $2,000 support level.