Key Points
- Ethereum’s price has dropped and is lacking bullish momentum due to low demand from institutional investors.
- The supply of Ethereum on centralized exchanges has increased, coinciding with low demand from US spot ETH ETFs.
The price of Ethereum (ETH) has seen a 2.5 percent decrease over the past 24 hours, trading around $2,422 during Tuesday’s early European session. This follows a rejection from the 50-day Moving Average (MA).
Ethereum, a large-cap altcoin with a fully diluted valuation of approximately $291 billion and a daily average traded volume of around $16.3 billion, has been consolidating in a symmetrical triangular pattern since early August, indicating a potential breakout soon.
Technical Standpoint
From a technical viewpoint, Ethereum’s price has been forming a potential head and shoulders (H&S) pattern in the daily time frame, along with a bullish divergence in the Relative Strength Index (RSI).
A consistent close above the support/resistance level of around $2,800 could propel Ethereum’s price toward its all-time high (ATH) in the coming months. Conversely, a consistent drop below the support range between $2,300 and $2,150 could establish a new bearish precedent in the altcoin space, leading to further short-term capitulation.
The recent Fed rate cut and the deteriorating geopolitical situation in the Middle East, which have shifted the global economic outlook, are likely to trigger a fresh crypto bull run in the near term.
Ethereum Whales Watch from the Sidelines
On-chain data analysis shows that the supply of Ethereum on centralized exchanges increased by more than 37.3K in the past 24 hours, mostly on Coinbase Pro and Bitfinex. This spike in Ether’s supply on centralized exchanges coincides with low demand from the US spot ETH ETFs.
On Monday, the US spot Ether ETFs registered a zero net cash flow, while the US spot BTC ETFs registered a total cash inflow of over $235 million. As a result, the US spot Ether ETFs have now registered a cumulative total net outflow of over $553 million.
On-chain data analysis also reveals that an Ethereum ICO participant address, with a balance of around 150k, has sold more than 45k Ether, worth over $113 million, since September 22.
Bigger Picture
The Ethereum network remains the undisputed Web3 leader, with about $45 billion in total value locked and over $84 billion in stablecoins supply. The Ethereum ecosystem boasts the largest decentralized financial (DeFi) platforms led by Lido liquid staking, EigenLayer for restaking, AAVE for lending, and Uniswap (UNI) DEX, among many others.
However, the Ethereum network has faced stiff competition from upcoming layer one chains led by Solana, Telegram-backed Toncoin, Tron, and BNB Chain among others.