TLDR:
Ethereum (ETH) price has been declining since March despite ETH ETF launches
Technical indicators suggest a potential price breakout for ETH
Whale interest in ETH is slowly reemerging after summer market slump
ETH exchange inflows are reducing, possibly signaling easing sell pressure
Positive funding rates indicate optimism among ETH futures traders
Ethereum, the second-largest cryptocurrency by market capitalization, is showing signs of a potential price recovery after months of decline.
Despite the launch of Ethereum-based exchange-traded funds (ETFs) in the United States, ETH’s price has fallen over 32% since late March.
However, recent data and market indicators suggest that selling pressure may be easing and a price breakout could be on the horizon.
Technical analysis from crypto analyst Michaël van de Poppe points to a bullish divergence in Ether’s price chart against Bitcoin.
This pattern, often associated with price reversals from downtrends, indicates strengthening market momentum despite lower price lows. Van de Poppe suggests that if this trend continues, it “could be a significant push for the entire market.”
I’m getting excited about the $ETH chart.
The bullish divergence is still valid and a higher low has been made.
The downtrend of the past months is likely going to be broken upwards.
That could be a significant push for the entire market. pic.twitter.com/M3hDhxD56Z
— Michaël van de Poppe (@CryptoMichNL) September 9, 2024
Whale activity, which can significantly impact cryptocurrency prices, is also showing signs of renewed interest in Ethereum. According to on-chain intelligence firm Lookonchain, a savvy whale recently purchased 5,000 ETH worth over $11.4 million.
This follows a period of profit-taking by the same entity, who had previously bought ETH at lower prices and sold at higher prices, netting more than $4 million in profits.
A smart whale bought 5,000 $ETH($11.46M) at the bottom again in the past 2 days!
The whale bought 5,200 $ETH at an average price of $1,322 in November 2022.
Then sold it at an average price of $2,093 in January, December 2023, and January 2024, making more than $4M!… pic.twitter.com/yTKB12dU4i
— Lookonchain (@lookonchain) September 9, 2024
Exchange data provides further evidence of potentially easing sell pressure on Ethereum. CryptoQuant reports that ETH inflows to derivative exchanges surpassed 40,000 ETH on September 7th.
However, subsequent withdrawals from these exchanges suggest a decrease in traders’ interest in opening short positions. Additionally, spot exchange inflows reached their lowest level since late July on September 8th, with only 37,415 ETH being deposited.
The Ethereum Foundation recently sold 450 ETH for $1 million worth of DAI stablecoin. Metalpha, a Hong Kong-based crypto wealth manager, has also moved more than $54 million worth of ETH to Binance in the past few days.
Despite these mixed signals, Ethereum’s price action shows three consecutive green candles, potentially signaling an upward breakout attempt. For this breakout to materialize, buyers would need to overwhelm sellers in the market.
The Relative Strength Index (RSI) currently sits at 37, indicating bearish territory, but its movement suggests potential seller exhaustion.
Ethereum’s funding rates have turned positive, signaling optimism among futures traders despite the overall bearish sentiment in the market. This divergence between short-term trader sentiment and longer-term price trends could indicate a shift in market dynamics.
The launch of Ethereum ETFs in July was anticipated to drive significant price increases, similar to the impact of Bitcoin ETFs earlier in the year.
However, Ethereum-based ETFs have seen continuous negative outflows, with cumulative net outflows exceeding $568 million since their launch, according to data from Farside Investors.
