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

Ethereum at $2,490 today

• Short positions again bore the brunt of liquidations as Ethereum briefly regained $2,500 on Wednesday.
• A revival in risk appetite for technology shares has supported the recovery, following SpaceX's report of 161% YoY revenue growth.
• Holding above the 20-day and 50-day EMAs could allow ETH to break through resistance at $2,548.

Renewed appetite for risk in technology shares extended to cryptocurrencies on Wednesday, lifting Ethereum (ETH) briefly above $2,500 for the first time in over a week.

What is driving ETH's advance alongside stock indices?

Short positions made up $43 million of the $53.7 million in ETH futures liquidations recorded over the past 24 hours as prices advanced, according to Coinglass data. Shorts have now accounted for the largest share of liquidations for a third consecutive day.

Stronger risk appetite in equities provided the backdrop to 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 drove much of the gains, after the company posted third-quarter revenue growth of 161% YoY. According to CNBC, Musk said SpaceX and his carmaker Tesla had formed special committees to discuss a merger.

The parallel gains in ETH, other major cryptocurrencies and stock indices extend the strengthening correlation between the two asset classes over the past week. Last week, cryptocurrencies fell in tandem with technology shares as concerns over AI-related spending triggered selling in leading semiconductor stocks across the US, Korea and Taiwan markets.

A sustained crypto recovery is expected by trading firm Wintermute if more technology and AI-related companies deliver improved Q3 earnings.

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 offer some encouragement, though. Ethereum staking reached a record 43.8 million ETH, equivalent to 35.9% of the total supply, according to Bitwise.

Ethereum technical outlook: Can ETH sustain its recovery above short-term EMAs?

With a daily close above the 20-day and 50-day Exponential Moving Averages (EMAs) appearing likely, Ethereum could challenge resistance at $2,548. The two averages stand at $2,501 and $2,483, respectively.

A sustained recovery above the short-term EMAs, followed by a break through $2,548, would put the $2,636 hurdle in ETH's path ahead of a retest of resistance at $2,781.

Support remains in place below $2,400, where the 100-day EMA and the $2,355 horizontal level have provided a foothold for bulls over the past week. Should these levels give way, ETH could retreat to support at $2,204, followed by $1,971 if selling persists.

A sideways-to-higher bias, with room for additional gains, is indicated by the 14-day Relative Strength Index (RSI) at around 50 and the Stochastic near 72. The latter, however, is nearing overbought territory.