Ethereum revisits $2,500 as tech stocks gain on SpaceX surge

Ethereum trades at $2,490 today

• A brief return above $2,500 on Wednesday prompted a fresh round of Ethereum liquidations, predominantly affecting short positions.
• SpaceX's reported 161% year-on-year revenue growth revived risk appetite in technology shares, with Ethereum's recovery following that improvement in sentiment.
• A sustained hold above the 20-day and 50-day EMAs could allow ETH to break through resistance at $2,548.

The $2,500 level was briefly surpassed by Ethereum (ETH) on Wednesday for the first time in over a week, as a renewed appetite for risk in technology shares spread to cryptocurrencies.

ETH advances in tandem with equity indices

Coinglass data show that the advance prompted $53.7 million in ETH futures liquidations over the past 24 hours, including $43 million in short positions. Shorts have now accounted for the largest share of liquidations for a third consecutive day.

An improving appetite for risk in equities preceded the advance, with the technology-heavy NASDAQ rising 1.3% while the S&P 500 added 0.7%.

A 10% surge in Elon Musk's SpaceX shares, following the company's report of 161% year-on-year revenue growth in the third quarter, accounted for much of the equity gains. According to CNBC, Musk said SpaceX and his carmaker Tesla had established special committees to discuss a merger.

The parallel gains in ETH, other leading cryptocurrencies and equity indices extend the strengthening correlation between the two asset classes seen over the past week. Last week, concerns over AI-related expenditure prompted selling in major semiconductor shares in the US, Korea and Taiwan, with cryptocurrencies falling alongside technology stocks.

Should more technology and AI-related companies report stronger Q3 earnings, trading firm Wintermute expects the crypto recovery to be sustained.

ETF investors, however, remain unconvinced by ETH's modest rebound over the past two days. According to SoSoValue data, US spot ETH exchange-traded funds (ETFs) saw net outflows of $26.13 million on Tuesday, taking the number of negative readings to 15 in the last 16 trading days.

On-chain developments offered some encouragement, however. Bitwise reports that Ethereum staking reached a record 43.8 million ETH, equivalent to 35.9% of the total supply.

Ethereum technical outlook: ETH targets a recovery above short-term EMAs

With a daily close above the 20-day and 50-day exponential moving averages (EMAs), at $2,501 and $2,483 respectively, looking likely, Ethereum could challenge resistance at $2,548.

Holding above the short-term EMAs and breaking through $2,548 would leave ETH facing a hurdle at $2,636, ahead of a retest of resistance at $2,781.

Support remains below $2,400, where the 100-day EMA and the horizontal level at $2,355 have provided a foothold for bulls over the past week. A break beneath these levels could bring support at $2,204 into view, followed by $1,971 should losses deepen.

With the 14-day Relative Strength Index (RSI) around 50 and the Stochastic indicator near 72, momentum points to a sideways-to-higher bias and leaves room for further gains. The Stochastic reading is, however, nearing overbought territory.