Ethereum
Bullish Breakout Towards $4,000 More Likely For ETH
Ethereum price has consolidated above the 100-day and 200-day moving averages, indicating a bullish trend.
Given the launch of ETH spot ETFs, upward momentum targeting the upper boundary of the wedge is anticipated in the medium term.
By Shayan
The daily chart
A close look at Ethereum’s daily chart reveals that after breaking above the critical 100-day moving average at $3,354, it entered a period of sideways trading, with the price lacking a clear direction.
This phase confirms the breakout and suggests a balance between buyers and sellers in the market.
However, with the official launch of ETH spot ETFs and a net inflow of $106.6 million on the first day, an increase in buying interest in Ethereum is expected, paving the way for a continuation of the bullish rally. In this scenario, the main target for buyers is the upper boundary of the wedge at $3.7K.
In summary, the price is confined within a crucial range, delimited by the upper boundary of the wedge ($3.7k) and important support at $3.4k. A bullish breakout seems more likely.
The 4 hour chart
On the 4-hour chart, Ethereum buyers struggled to break above the previous major high of $3,500 due to the current selling pressure, leading to a period of sideways consolidation.
During this consolidation, price formed a rising wedge pattern.
Typically, this pattern suggests a bearish reversal. However, given the bullish market sentiment, a resurgence in demand is expected, which could lead to a breakout above the wedge.
However, in case of an unexpected bearish breakout, the price could enter a short-term retracement phase before embarking on the next impulsive upward move. This bearish scenario could provide a better opportunity for participants to accumulate ETH at lower prices.
By Shayan
As Ethereum price recovers below the $3,000 mark and the official launch of ETH Spot ETFs gets underway, analyzing investor behavior using on-chain metrics can provide insights into the reasons for the recent rally and indications of future trends.
The chart below shows the Ethereum Exchange Reserve metric, which measures the amount of ETH held in exchange wallets. An increase in exchange reserves typically indicates that investors are depositing their coins onto exchanges, likely to sell them. Conversely, a decrease suggests accumulation by holders, as coins are being removed from exchanges for long-term storage.
Recent data reveals that the foreign exchange reserve metric has fallen rapidly in recent weeks, particularly following the announcement of the potential Spot ETF launch in July. This trend indicates that many large investors took advantage of the recent market correction to buy the dip. These investors are now removing their coins from exchanges, reducing the available supply and signaling long-term holding intentions. This reduction in available supply, combined with the growing buying interest sparked by the Spot ETF launch, sets the stage for a potentially sustainable recovery in the months ahead.
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