September has traditionally been a slow month for the collective business, and September 2021 was no exception. Ethereum was down 12.58 percent for the month, but it had made up a lot of ground by October.
At the time of publication, the asset had already gained 12% for the month. With more than 25 days till the end, price volatility has the potential to sway the market. However, there were signs that the asset was approaching its all-time high, with positive momentum now favoring the largest Altcoin.
Ethereum’s Structural Bounce-back
Ethereum came close to breaking over its previous ATH level of $4350 during the August rally but fell short and retraced from $4200 in September. The asset’s bounce back zone, on the other hand, can be deemed a significant range.
During the May corrections, the $2900-$2700 zone served as a solid resistance, but Ethereum could not break through and eventually fell below $2000. After breaking above $3000 last month, the asset found support in the same $2900-$2700 level (as shown in the chart above) for the past week before breaking above $3000 once more.
As a result, this range may represent the liquidity zone from which Ethereum drew bullish strength. While a retest of $3000 is still feasible, the rebound from the $2900-$2700 area is substantial.
The Funding Rate and Open Interest Rate are both increasing
A similar story was generating a shift in the derivatives market at the time. As the narrative became bullish across the space, data from crypto quant revealed that all open exchange interest climbed after the recent price shift. In addition, however, there was a significant increase in the financing rate, which was very favorable at the time of publication.
The favorable feeling can fuel bullish momentum over the following few weeks, as more and more long bets are opened at press time. This could eventually allow Ethereum to achieve or surpass its prior all-time high.
However, be wary of DAA
Bullish signs were visible. However, it’s vital to remember that these signals are only applied to daily active addresses. Furthermore, a bearish divergence exists now, which might turn into a sell signal if prices do not go forward quickly. As a result, the next several weeks could be crucial for Ethereum, as volatility could make or break the upward trend.