Key Points
- Ethereum’s price is expected to rally to $5K amid signs of a bullish breakout.
- Despite low demand from institutional investors, Ethereum network registers increased whale activity.
Ethereum has been in a correction phase for the past seven months. However, it’s now nearing the apex of the consolidation, indicating an impending bullish breakout. Since the crypto market downturn in August, Ethereum, which has a fully diluted valuation of around $292 billion and a daily average traded volume of approximately $13.4 billion, has successfully rebounded from the 200-weekly Moving Average (MA).
In the daily time frame, Ethereum’s price against the US dollar is nearing the apex of a potential symmetrical triangular pattern, hinting at a significant breakout on the horizon. Additionally, Ethereum’s price has been forming a potential inverted head and shoulder (H&S) pattern in the daily time frame, along with bullish divergence on the Relative Strength Index (RSI).
Technical Analysis and Predictions
From a technical perspective, Ether’s price has been retesting the lower border of a rising macro channel, which began in late 2022. According to various crypto analysts, including Ali Martinez, the next wave of the Ethereum price bull run is about to commence in the near term. However, if the altcoin consistently closes below the established support level of around $2,300 in the near term, Ethereum’s bullish sentiment could be invalidated. In such a scenario, Ether’s price could drop further below $2K before rebounding in the near future toward its all-time high.
Ethereum Network’s Whale Activity
Since the crypto crash on August 5, the supply of Ether on centralized exchanges has increased by more than 250k, worth over $600 million. In the past week, approximately 30K Ether has been deposited in various crypto exchanges led by Coinbase Pro and Bitfinex. This significant inflow of Ether to crypto exchanges is largely due to the low demand from institutional investors led by the US spot Ether ETFs. On Tuesday, the US spot Ether ETFs registered a net cash outflow of about $8 million led by Fidelity’s FETH and Bitwise’s ETHW.
Interestingly, none of the US spot Ether ETF issuers registered a net cash inflow on Tuesday. In total, the US spot Ether ETFs have registered a cumulative net cash outflow of about $561 million, with the outflow expected to continue until Grayscale’s ETHE stabilizes.
The Bigger Picture
The Ethereum network has greatly benefited from its staking program. As of this report, around 28.9 percent of all Ether in circulation has been staked, up from approximately 23.8 percent in January 2024. As a result, the Ethereum network has attracted more web3 developers compared to its competitors, including Solana (SOL). As of this report, the Ether network had about $44.5 billion in total value locked (TVL) and over $84.7 billion in stablecoin market cap.
