Key Points
- Ethereum’s price surged by 4.26% overnight, hinting at a potential breakout rally.
- Institutional demand for Ethereum is growing, with net assets crossing the $12 billion mark.
The price of Ethereum (ETH) experienced a significant 4.26% increase overnight, forming a bullish engulfing candle and completing a morning star pattern.
At present, Ethereum is trading at a price of $3,398, testing the 50-day EMA line as it rebounds from the 100-day EMA.
Ethereum Price Analysis
The hourly chart suggests a possible breakout, indicating a potential entry point for price action traders.
The Ethereum price action on the 1-hour chart shows a resistance trendline formed during the recent correction.
This trendline completes a triangle pattern with the recovery run from the previous night, hinting at a possible triangle breakout rally.
The Ethereum price action also forms an Adam and Eve pattern, with a V-shaped recovery and a rounding bottom reversal.
The neckline of this pattern aligns with the 38.20% Fibonacci level at $3,477.
A bullish breakout from this triangle pattern could conclude the short-term pullback phase and increase the likelihood of a bullish pattern breakout.
According to Fibonacci levels, this breakout rally could potentially reach the $4,000 psychological mark before the end of 2024.
Institutional Support for Ethereum
Despite a negative inflow of $226 million from US spot Bitcoin ETFs, institutional demand for Ethereum has surged.
On December 23, there was a daily net inflow of $130.76 million, pushing total net assets beyond the $12 billion mark.
This represents 2.94% of the Ethereum market cap, with a cumulative total net flow of $2.46 billion.
Leading the bullish trend, BlackRock purchased $89.51 million worth of Ethereum, followed by Fidelity with $46.37 million.
Bitwise acquired a cumulative $963.72k worth of Ethereum, and Grayscale was the only ETF to record an outflow, worth $6.09 million.
Ethereum’s On-chain Insights
As institutional demand for Ethereum increases, Ethereum’s network growth also indicates a bullish path ahead.
A recent tweet by Cryptoquant highlighted several key Ethereum metrics, all giving bullish signals.
According to Egyhashx, a technical on-chain analyst at Cryptoquant, these factors suggest a positive bullish outlook for Ethereum.
Ethereum’s estimated leverage ratio has risen significantly over the past few months, from 0.35 in August to nearly 0.5 in December.
This increase highlights the growth in leverage trading in the derivatives market across all Ethereum exchanges.
The fund holding on Ethereum of all symbols has reached 3.6 million, compared to less than 3 million in late October.
Overall, funding rates remain positive, with the Korean premium index skyrocketing in December.
The premium rose from -2 to 5.1 at its peak in late December, marking the highest Korean premium index for Ethereum since September.
Therefore, the increasing demand for Ethereum in institutions and the growing interest in the Korean markets are expected to stimulate the price of the biggest altcoins.
