The Ethereum price holding above the $2000 level has inspired optimism about a potential market bottom forming in the crypto space. With reduced selling pressure from retail traders and increased accumulation by large holders, a bullish outlook is supported, hinting at a likely recovery to come.
The recent shift in the crypto market towards a bullish trend since the second week of September coincides with expectations of a 0.5% rate cut by the U.S. Federal Reserve during the upcoming FOMC meeting. This anticipated rate cut, the first in four years, is predicted to have broader impacts beyond the U.S. market, stimulating economic activities and investment in risk assets like cryptocurrencies. This macroeconomic event sets the stage for a potential price recovery for leading digital assets such as Bitcoin and Ethereum.
Data from Santiment shows a significant capitulation of 31,702 ETH by Ethereum holders on September 10th, indicating the purge of weak hands from the market and alleviating selling pressure. Similarly, a similar pattern was observed during panic selling on August 5th, which helped establish firm support for ETH around the $2200 level. Furthermore, there has been a steady increase in the supply held by top addresses, currently at 43.98%, signaling strong confidence in Ethereum’s potential for price growth.
Analyzing the 4-hour chart, Ethereum shows an immediate reversal from the $2150 support level on September 7th, highlighting active demand pressure that propelled the asset by 7.5% to stabilize at $2300. This move led to an increase in the Ethereum market cap to $277.9 billion. Moreover, the market reveals a double bottom formation, often a sign of the end of a correction trend, suggesting a potential 21% surge in the ETH price to challenge $2800, followed by $3100.
Despite the surge in ETH supply on exchanges to 21.3 million coins, indicating a risk of profit-taking by speculative traders, the bullish outlook for Ethereum price remains intact due to active accumulation by whales and institutions amidst a major reversal pattern.