Cryptocurrency analysis company Blofin Academy shared its evaluations about the latest rally in the market. According to Blofin Academy, Ethereum is the source of the latest rally in Bitcoin and altcoins. It was ETH’s Shanghai update as well as its layer 2 adaptation. Blofin Academy analysts summarized their thoughts on the latest rally:
“The rally continues, but the momentum has weakened significantly compared to the previous two days. BTC and other mainstream coins are holding tight near their current price levels, while crypto market participants who do not hold positions are waiting for a pullback.
After positive economic data sent crypto and stock prices skyrocketing, the crypto market remained in a high position. BTC and other coins have significant divergences between prices and moving averages, which is not a bullish signal in the near term.
With the fluctuation of BTC, the predicted volatilities are falling. However, since realized volatility is greater than estimated volatility on a 7-day basis, weekly options may not be suitable for entries for the next price action.
It can be thought that the rally in January was due to Ethereum rhetoric such as the Shanghai upgrade and other Layer2 adoption. Also, possible gamma squeeze triggered the price rally.”
Gamma squeeze is a situation in which options sellers are forced to buy the underlying asset to hedge their positions, increasing the price of the underlying asset. The author suggests that this could be a factor in ETH’s recent price rally. Analysts also talked about the price level to watch for ETH:
“Therefore, it is worth observing the potential resistance of ETH to protect the unrealized profit. From a Gamma Squeeze perspective, the resistance level will be $1,600 and $1,800k. Looking at the K-line, the price level above can be verified as a key resistance level.”