Ethereum faces sudden and strong buying activity, the market reacts.
Ethereum traders have bought more than 16,000 ETH in the last 60 minutes, according to IntoTheBlock data provided on Twitter.
A sudden spike in buying activity
As data suggests, traders and investors have purchased 15,500 ETH in the last 30 minutes. The sudden spike in buying activity has resulted in almost a 4% price surge.
The spike in buying activity was a long-awaited event for the market that has remained in a deep correction state since the end of December last year. Major altcoins and Bitcoin have lost approximately 15% of their value in the first days of the new year.
Ethereum had lost 30% of its previously gained value, with its ATH staying at $4,872. Ether has failed to break the $5,000 resistance that most traders call the “diamond ceiling.”
Ethereum being technically oversold
As numerous technical indicators have previously suggested, Ethereum has been strongly oversold on the market, with such widely known indicators as the Relative Strenght Index reaching two-year lows.
The technical oversaturation of the market with sales and short orders usually leads to a strong spike in the asset’s price once even slight buying power appears on the market. The price spike on assets like Ethereum that remain in a correction state is tied to the short squeeze, which was the foundation of the most recent 5% recovery on ETH.
U.Today covered the main reason behind the cryptocurrency market drop that has mostly affected larger capitalization coins and tokens. With the key interest rate hike, more traders have decided to leave risk-on assets like cryptocurrencies and lean toward safer options.