Ethereum Price Prediction: ETH Approaches Critical Resistance at $3,250

Ethereum (ETH) has booked an 8% gain in the past 7 days as traders seem to have jumped back into the market since the beginning of the year.

The token briefly surpassed the $3,200 mark during today’s session, but selling pressure ramped up as soon as it did.

On December 31, data from CoinGlass¹ showed that ETH’s funding rate climbed to its highest level since November 20 to 0.0093%. This indicates that the amount of long positions being opened on exchanges expanded rapidly.

When funding rates are positive and steadily rising during uptrends, it means that speculative activity is rising. This means that leveraged positions are once again entering the market, which supports a bullish short-term outlook.

Market sentiment also seems to be improving as the Fear and Greed Index entered Neutral territory just a couple of months after hitting a record low.

We have been claiming that this record low was a contrarian signal, and this steady recovery confirms that view. The last time this happened, ETH rallied to a new all-time high alongside Bitcoin (BTC) and BNB Coin (BNB).

Open Interest and ETF Net Inflows Recover

Open interest (OI) supports this view as the amount of outstanding ETH futures contracts has been steadily expanding since late October and is now just 13% below its July peak.

As traders’ participation increases, bears could be about to get squeezed out of their short positions. If this happens, the next few days could bring forth a spike in volatility to the upside.

Meanwhile, ETH-linked exchange-traded funds (ETFs) also booked their biggest single-day positive inflow in weeks.

Data from Farside Investors² shows that these vehicles brought in $174 million on December 2 to add a net total of $161 million by the end of last week.

Are these early signals that the bear market is over? Is altseason about to begin?

Ethereum’s price action indicates that the top altcoin still needs to climb above a key resistance level to confirm a trend reversal.

ETH Needs to Move Above $3,350 to Confirm a Full-Blown Trend Reversal

The daily chart shows that ETH is nearing a key resistance at $3,250 that could be considered the most relevant structural price zone for the token.

ETH/USD Daily Chart (Coinbase) – Source: TradingView

A move above this mark would invalidate the asset’s bearish price structure and could signal the beginning of its next leg up.

A handful of altcoins have already broken their structural resistances in the past couple of days – e.g., XRP (XRP). However, as the most influential token in this category, ETH should follow through to confirm a buy signal.

Meanwhile, momentum indicators are already flashing buy ahead of this move. The Relative Strength Index (RSI) has surged to its highest level since October 6, right before the flash crash occurred.

A more decisive and definitive confirmation of the move would come if the price rises past the 200-day exponential moving average (EMA), as that would confirm a change in the token’s long-term trend.

ETH still needs to do some work to pull out the necessary liquidity to get to $4,000 again. However, these early buy signals seem to indicate that the worst of this brief bear market is behind us.