Is Ethereum set for a breakout as Open Interest and bulls rise?

Bitcoin and Ethereum recorded gains earlier this week following an indefinite extension of the US ceasefire with Iran.

Ethereum hit the $2,400 level on Wednesday but has now slightly retraced and is currently trading at $2,350 per coin. 

The coin could rally higher in the near term amid a recovery of bullish interest in its derivatives market.

Positive derivatives data could push ETH’s price higher

ETH funding rates, which had been negative for nearly a week, have flipped positive, hovering around 0.0031% as of Thursday.

Funding rates are periodic payments between traders to align the price of a perpetual contract with its underlying spot counterpart. 

Currently, long traders pay shorts when rates are positive, indicating dominant bullish positioning. The opposite is the case when rates are negative.

A bullish sentiment is also seen in the Taker Buy Sell Ratio, which measures the difference between buying and selling volumes of traders using market orders in perpetual swap trades.

At the moment, the metric has surged back into bullish territory, indicating that buying volume is surpassing selling volume.

The bullish dominance coincides with ETH's open interest, the worth of outstanding contracts in ETH derivatives.

This metric rose by 440,000 ETH over the past few hours, indicating a growing bullish bias. 

On the spot side, while demand remains, the rise toward $2,400 on Wednesday triggered a slight increase in profit and loss realization over the past week. 

The move potentially stems from investors distributing after breaking even, as Ethereum is now trading near its realized price or average onchain cost basis.

Ethereum price forecast

The ETH/USD 4-hour chart is bearish and efficient as Ether is still trading below the key 200-day  Exponential Moving Average (EMA).

At press time, Ethereum is trading at $2,350, above its 20, 50, and 100-day Exponential Moving Averages (EMAs), which are clustered between roughly $2,270 and $2,350.

The EMAs are providing support in the near term and could allow Ether to rally higher over the coming hours and days. 

Momentum stays supportive, with the Relative Strength Index (RSI) around 54.

The Moving Average Convergence Divergence (MACD) is also within the positive territory, maintaining the bullish bias on the 4-hour timeframe. 

If the bullish scenario continues, ETH could validate an ascending triangle pattern and rally past the $2,466 resistance in the near term. 

Such a move could see the top altcoin rise to test the $2,746 resistance before hitting $2,831.

However, if the bullish trend fails, the bears would regain control and push ETH towards the immediate resistance at $2,350. 

A daily candle close below this support level would expose horizontal levels at $2,211 and $2,107 before more distant floors near $1,909 and $1,741.

The market sentiment remains positive, which could pave the way for Bitcoin and Ether to extend their gains over the next few days.