The maintainability of Ethereum’s price above the psychological level of $2000 has instilled hope for a potential market bottom. A decrease in selling pressure from retail traders coupled with increased accumulation by major holders is propelling a positive outlook and potential recovery in the future.
The recent bullish shift in the crypto market since the second week of September coincided with expectations of a 0.5% rate cut by the U.S. Federal Reserve during the FOMC meeting. This move, the first rate cut in four years, is anticipated to have broader implications beyond the U.S. market, boosting economic activities and investment in risk assets like cryptocurrencies.
Data from Santiment on network realized profit/loss shows a significant capitulation by Ethereum holders on September 10th, indicating the exit of weak hands from the market, thereby alleviating selling pressure. A similar occurrence during the panic selling on August 5th helped establish stable support for Ethereum around $2200.
Moreover, the percentage of supply held by top addresses has been steadily climbing, currently standing at 43.98%, reflecting strong confidence in the potential growth of Ethereum’s price.
The 4-hour chart for Ethereum depicts an immediate reversal from the $2150 support on September 7th, leading to a 7.5% increase and stabilization at $2300. This momentum has unveiled a double bottom formation in the price chart, often a sign of the end of a correction trend, potentially pushing Ethereum’s price up by 21% to challenge $2800 and then $3100.
While there is a surge in ETH supply on exchanges to 21.3 million coins, signaling profit-taking risks by speculative traders, a definitive higher low formation in the relative strength indicator at the $2200 support area indicates buying pressure.
Despite the surge in ETH supply on exchanges, the ongoing accumulation by whales and institutions alongside a major reversal pattern signal a positive future for Ethereum’s price trajectory.
In conclusion, despite the rise in ETH supply on exchanges, the ongoing accumulation by whales and institutions, combined with a major reversal pattern, suggest a bullish outlook for Ethereum’s price movements.