Ethereum’s price has been consolidating above the 100 and 200-day moving averages, indicating a bullish trend in the market. The recent breakout above the critical 100-day moving average at $3,354 has led to sideways fluctuation, suggesting an equilibrium between buyers and sellers. However, the launch of spot ETH ETFs and a net inflow of $106.6 million on their first day have sparked increased buying interest for Ethereum. This, in turn, is expected to push the price towards the wedge’s upper boundary at $3.7K. The current price range is crucial, bounded by the upper boundary of the wedge and significant support at $3.4K, with a bullish breakout seeming more likely in the mid-term.
Technical Analysis and Potential Price Movements
On the 4-hour chart, Ethereum buyers are facing resistance at the previous major swing high of $3.5K, leading to sideways consolidation. The price has formed an ascending wedge pattern, typically signaling a bearish reversal. However, given the overall bullish sentiment in the market, a resurgence in demand is expected, potentially breaking above the wedge pattern. In case of an unexpected bearish breakout, the price might experience a short-term retracement before the next impulsive bullish move. This correction could present an opportunity for participants to accumulate ETH at lower prices, depending on market conditions.
On-Chain Metrics and Investor Behavior
Amid Ethereum’s price recovery and the launch of ETH Spot ETFs, analyzing investor behavior through on-chain metrics can provide valuable insights into market trends. The Ethereum Exchange Reserve metric, which measures the amount of ETH held in exchange wallets, indicates investor sentiment. A rapid decline in the exchange reserve metric in recent weeks, especially after news of the potential Spot ETFs launch, suggests that large investors have been buying the dip and withdrawing their coins from exchanges for long-term storage. This reduction in available supply, combined with growing buying interest due to the ETFs, sets the stage for a sustainable rally in the coming months.
Ethereum’s price has shown signs of bullish momentum, supported by the launch of spot ETH ETFs and positive investor behavior indicated by on-chain metrics. The price is likely to target the upper boundary of the wedge pattern in the mid-term, with potential for a sustained rally based on reduced exchange reserves and long-term holding intentions of investors. Traders and investors should keep a close eye on key support and resistance levels, as well as market sentiment, to make informed decisions in the ever-evolving cryptocurrency market.
