As a seasoned financial analyst with over a decade of experience in the crypto market, I have witnessed numerous bull and bear cycles. The recent price action in Ethereum has piqued my interest due to its consolidation above crucial moving averages and the official launch of spot ETH ETFs.
The price of Ethereum has been holding steady above its 100-day and 200-day moving averages, suggesting a positive or bullish market trend.
With the introduction of spot Ethereum exchange-traded funds (ETFs), it’s expected that there will be a surge in Ethereum prices towards the upper limit of the current price range in the intermediate term.
Technical Analysis
By Shayan
The Daily Chart
An in-depth analysis of Ethereum’s daily price chart shows that following its breakthrough above the significant resistance level of $3,354 represented by the 100-day moving average, the cryptocurrency underwent a phase of indecisive price action. During this time, Ethereum displayed no clear trend or directionality.
During this stage, the market exhibits clear signs of a trend emerging as the number of buyers and sellers reaches a balance.
With the debut of Ethereum-backed spot ETFs and a substantial inflow of $106.6 million on their first day, investor interest in Ethereum is anticipated to surge, potentially fueling further gains and continuing the bullish trend. In this situation, the primary objective for buyers lies at the upper limit of the wedge formation, which stands at approximately $3,700.
Based on my extensive experience in financial markets and analysis, I can summarize the current situation as follows: The price is currently contained within a crucial range, with the upper boundary being set by the resistance level at $3.7K and a strong support level present at $3.4K. In my opinion, given the market trends and historical data I’ve observed, a bullish breakout appears more likely to occur.
The 4-Hour Chart
On the 4-hour Ethereum chart, efforts by buyers to surpass the previous significant peak of $3,500 have been thwarted by strong selling forces, leading to a phase of price stability between that level and the current price.
During this consolidation, the price has formed an ascending wedge pattern.
As a crypto investor, I’ve noticed this pattern before – it usually indicates a bearish reversal. But with the current optimistic market vibes, there’s a strong possibility that demand will surge once again. This could result in us breaking above the wedge formation and continuing our uptrend.
In the event of an unexpected drop in Ethereum’s price, it may first experience a brief correction or pullback before continuing with its uptrend. This potential downturn could present a valuable chance for investors to purchase Ethereum at reduced costs.
Onchain Analysis
By Shayan
Examining investor activity on Ethereum’s blockchain through on-chrome metrics becomes particularly valuable now that its price is rebounding above $3K and ETH Spot ETFs have been introduced officially. Insights gained from this analysis can help explain the causes of the recent market upturn and potentially signal upcoming trends.
The following chart represents the Ethereum Exchange Reserve figure, indicating how much Ether is stored in exchange wallets. A rise in exchange reserves usually signifies investors transferring their coins to exchanges for selling purposes. In contrast, a decline suggests that holders are withdrawing their coins from exchanges for safekeeping, a sign of accumulation.
New data shows that the exchange reserve metric has been decreasing significantly over the past few weeks, accelerating after the announcement of upcoming Spot ETF launches in July. This downward trend suggests that large-scale investors have seized the opportunity presented by the market correction to purchase cryptocurrencies at lower prices. In turn, these investors are withdrawing their coins from exchanges, shrinking the supply and demonstrating their commitment to long-term holding. The diminishing exchange supply, combined with escalating demand due to the ETF launches, could lead to a prolonged price uptrend in the upcoming months.
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2024-07-24 17:30