Ethereum’s price has shown signs of bullish momentum as it consolidates above the 100 and 200-day moving averages. After breaking above the critical 100-day moving average at $3,354, the price entered a period of sideways fluctuation, indicating an equilibrium between buyers and sellers in the market. However, with the launch of spot ETH ETFs and a net inflow of $106.6 million on their first day, an increase in buying interest for Ethereum is expected. This could lead to a continuation of the bullish rally towards the wedge’s upper boundary at $3.7K. The price is currently confined within a crucial range, bounded by the wedge’s upper boundary and significant support at $3.4K, with a bullish breakout seeming more likely.
Potential Bearish Reversal
On the 4-hour chart, Ethereum buyers have struggled to breach the previous major swing high of $3.5K due to prevailing selling pressure, resulting in a period of sideways consolidation. An ascending wedge pattern has been formed, which typically suggests a bearish reversal. However, given the overall bullish sentiment in the market, a resurgence in demand is expected that could lead to a break above the wedge. In case of an unexpected bearish breakout, the price might enter a short-term retracement phase before the next impulsive bullish move. This bearish scenario could offer an opportunity for participants to accumulate ETH at lower prices.
Behavior of Investors and On-Chain Metrics
With Ethereum’s price recovering and the official launch of ETH Spot ETFs, analyzing the behavior of investors using on-chain metrics can provide insights into recent market trends. The Ethereum Exchange Reserve metric, measuring the amount of ETH held in exchange wallets, has shown a rapid decrease in recent weeks. This drop suggests that many large investors have taken advantage of the recent market correction to buy the dip. Investors withdrawing their coins from exchanges signal long-term holding intentions, reducing the available supply. The combination of a reduced supply and increasing buying interest due to ETF launch sets the stage for a potentially sustainable rally in the coming months.
Ethereum’s price appears to be on a path towards further bullish momentum, supported by the launch of spot ETH ETFs and a decrease in exchange reserves signaling long-term holding intentions among large investors. Despite the potential for a bearish reversal indicated by the ascending wedge pattern, the overall sentiment in the market remains positive. Traders and investors should closely monitor price movements and on-chain metrics to capitalize on potential opportunities presented by the current market conditions.