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Ethereum, the second largest cryptocurrency by market cap has been experiencing a prolonged period of price correction, leaving investors and traders questioning when the crypto asset will regain its upward momentum. As a result, an analyst from CryptoQuant has analyzed ETH’s on-chain metric and is now suggesting that Ethereum might be nearing the end of this correction phase, potentially setting the stage for a bullish turn. Related Reading: Ethereum Transaction Costs Hit Historic Lows: What Does This Mean For ETH? Metrics Signalling End Of The Slump According to the post by the CryptoQuant analyst Burak Kesmeci, key on-chain metrics indicate that the necessary liquidations on leveraged positions have occurred, and buyers are slowly regaining their footing. 2 Different On-Chain Metrics May Indicate We Are in the Late Stages of Ether’s Correction “Current data shows that buyers in Ether are gradually regaining strength. However, time will tell whether this is a temporary rebound or the start of a strong rally led by the bulls.” – by… pic.twitter.com/hrzhSLqdB4 — CryptoQuant.com (@cryptoquant_com) August 19, 2024 The analysis highlights two specific on-chain metrics that point to the possibility of a bullish reversal. These metrics are the Taker Buy Sell Ratio and Open Interest (OI), which provide insights into market sentiment and trading activity. The Taker Buy Sell Ratio is a metric that measures the ratio of buyers to sellers across all cryptocurrency exchanges. A positive ratio suggests buyers are becoming more dominant, which can be an early signal of increasing demand and potential price appreciation. According to Kesmeci’s analysis, the Taker Buy Sell Ratio for Ethereum has recently turned positive, indicating that buyers are beginning to regain control after a period of dominance by sellers. This shift in market stance is a promising sign that Ethereum could be on the verge of a recovery. A Closer Look At Ethereum Open Interest In addition to the Taker Buy Sell Ratio, Open Interest (OI) is another crucial metric the analyst mentioned in his analysis. OI represents the total number of open long and short positions in the market. High levels of OI often indicate that a significant price movement is imminent, as traders are heavily invested in the market’s next direction. Kesmeci noted: In June 2024, when Ethereum’s price reached $3,800, the OI data hit a record high, surpassing $13 billion. This indicated a market correction was likely, and indeed, the correction occurred. On the “bloody Monday” of August 5, 2024 (triggered by events in Japan), OI dropped to $7 billion. The decline in OI, coupled with the recent liquidation of leveraged positions, according to Kesmeci, suggests that the market has undergone the necessary corrections and may now be stabilizing. For Ethereum’s price to move significantly, the analyst disclosed that it is likely that leveraged players will need to re-enter the market, driving demand and pushing prices higher. Related Reading: Will Ethereum Reach Over $3,000 In September? Analyst Bets On 80% Odds Kesmeci’s analysis concludes that while the recent data shows buyers are gradually regaining strength, it remains to be seen whether this is the beginning of a sustained rally or just a temporary rebound. Featured image created with DALL-E, Chart from TradingView