Ethereum price may reach $20K amid bullish sentiment

Ethereum (CRYPTO:ETH) has faced challenges during the current bull cycle, underperforming compared to Bitcoin (CRYPTO:BTC) and other altcoins.  

Despite being the second-largest cryptocurrency by market capitalisation, it has struggled to reclaim its 2021 peak.

However, recent trends suggest that a bullish reversal could be on the horizon.

CryptoQuant's latest analysis indicates a significant increase in Ethereum's open interest (OI), which tracks active futures contracts across exchanges.

This rise in OI hints at a potential breakout and increased trader activity, particularly with long positions being opened.

Yet, Ethereum's price has not reflected this surge in futures activity, leading to a divergence between market expectations and actual price movements.

This discrepancy suggests growing pressure within the market.

Moreover, the elevated open interest raises concerns about possible liquidation cascades that could result in abrupt price fluctuations.

While the exact direction of a breakout remains uncertain, market sentiment appears to lean bullish.

If Ethereum can surpass critical resistance levels, it may trigger a sustained rally that could set new trends in the cryptocurrency space.

Frustration among Ethereum's community has grown due to its underperformance relative to other altcoins and ongoing concerns about co-founder Vitalik Buterin's periodic ETH sales.

Critics have also raised issues regarding centralisation and regulatory compliance that could impact Ethereum's future trajectory.

Despite these challenges, some analysts believe that negative sentiment may present a buying opportunity, as markets often move contrary to prevailing feelings.

Recent reports suggest Ethereum could see price targets ranging from $4,000 to $20,000 if it breaks resistance at $3,550.

The cryptocurrency saw a 4% increase in the past 24 hours, trading just above $3,400, fueled by broader market trends and increased holdings by World Liberty Financial.

“If ETH overcomes key resistance levels, it may ignite a sustained rally,”  one analyst noted.

At the time of reporting, the Ethereum (ETH) price was $3,218.67.