Key Points
- Ethereum (ETH) is nearing a correction bottom, setting the stage for a potential bull rally.
- The Ethereum network has seen a four-month peak in growth, with over 126k new wallets created.
After a period of significant bearish trends, Ethereum (ETH) appears to be reaching a potential bottom. This could set the stage for a major bull rally in the near future.
Last week, Ethereum, boasting a fully diluted valuation of roughly $277 billion and an average daily traded volume of around $11 billion, nearly retested the correction low from the market crash on August 5.
Retesting Crucial Levels
Currently, the ETH price against the US dollar is retesting a key trendline support level. This level has been forming since early 2023. A successful rebound from this support level could lead to a rally towards Ethereum’s all-time high in the coming months.
The anticipated Fed’s interest rate cut on September 18 and the upcoming general election are expected to trigger the next bull market phase. Additionally, Bitcoin has been forming a macro reversal pattern, which could accelerate the crypto cash rotation to altcoins and catalyze the much-anticipated altseason.
Network Growth Surge
The Ethereum network, the leading web3-focused blockchain with over $43 billion in Total Value Locked (TVL) and a $82 billion stablecoins market cap, has attracted more users recently. On-chain data analysis from Santiment shows that the network has registered significant growth, with over 126k new wallets created on a single day.
This increase in adoption has a bullish outlook for Ethereum in the near term. Moreover, Ethereum is the top tokenization ecosystem used by most institutional investors. The recent approval of spot Ether ETFs in the United States has also notably improved the altcoin’s fundamentals.
Whale Investors’ Reactions
Despite fears of further crypto selloffs in the remaining weeks of September, on-chain data shows varied reactions from Ethereum whales. Some have been offloading, while others have held all through. For example, the US spot Ether ETFs have now seen four consecutive weeks of cash outflows.
Interestingly, the US spot Ether ETFs have registered only one week of net cash inflows since the official approval by the US SEC.
According to on-chain data analysis by Lookonchain, an Ether whale sold approximately 28,554 ETH units, worth about $64.4 million, to pay off all debts on Aave, resulting in a loss of more than $17 million.
Meanwhile, the supply of Ether on centralized exchanges has remained low, dropping by over 500k in the past five months.
