- Ethereum price has breached a bull flag pattern, forecasting a $4,816 target.
- Transactional data shows entry into the price discovery phase is closer than anticipated.
- ETH dominance chart adds credence and hints at an explosive rally.
Ethereum price breached a crucial barrier, kick-starting a part of the massive uptrend that awaits it. While the short-term outlook for ETH might be concerning based on some metrics, others indicate that the long-term scenario remains largely bullish.
Ethereum price consolidates to move higher
Ethereum price is currently forming a bull flag. ETH rose 134% between July 20 and September 3, creating a flagpole. However, it consolidated soon after in a downward sloping channel, setting up the flag.
This pattern forecasts a 57% ascent, obtained by measuring the flagpole’s height and adding it to the breakout point. A decisive close above the flag’s upper trend line projects a target of $4,816.
On October 1, Ethereum price embarked on a 17% rally but is currently experiencing a slowdown as it encounters the $3,398 supply barrier. Investors should note that there is a chance for ETH to retrace to $3,202 before rallying higher.
Regardless of a correction, if ETH continues to climb, the barriers at $3,619, $3,952 and $4,380 will try to block its path. Therefore, the buyers need to shatter these hurdles to reach the target of $4,816.
ETH/USD 1-day chart
Supporting the bullish outlook is IntoTheBlock’s Global In/Out of the Money (GIOM) model, which shows little-to-no resistance for ETH beyond $3,815.
Roughly 1.95 million addresses that purchased 3.17 million ETH at an average price of $3,815 are “Out of the Money.” Therefore, a decisive close above $3,815 will convert a majority of the holders to profitable and remove the unwanted selling pressure.
This development could trigger a massive bull run for ETH, pushing it past its all-time high at $4,380 and toward the intended target at $4,816.
ETH GIOM chart
On the other hand, the dominance of ETH is printing an ascending triangle. This metric is a measure of Ethereum’s market cap relative to the other altcoins.
Based on theoretical projects, this technical formation forecasts a 19% increase in ETH dominance, painting a bullish picture for its future and adding credence to the optimistic thesis detailed above.
ETH Dominance chart
While things are looking up for Ethereum price from a long-term perspective, the reduction in daily active addresses over the past month despite the increase in price shows that the market participants are still fearful.
As long as there is uncertainty among a large group of holds, there is a chance for a flash crash that pushes Ethereum price down to $3,200.
ETH DAA chart
The 365-day Market Value to Realized Value (MVRV) model supports the short-term flash crash thesis. This on-chain metric is used to determine the average profit or loss of investors who purchased ETH over the past year.
Currently, the 365-day MVRV is hovering at 50%, indicating that over half of the market participants that purchased ETH are profitable. Therefore, these investors could book profits, triggering a short-term downswing for Ethereum price.
ETH 365-day MVRV chart
The supply of ETH on exchanges has risen by 170,000 over the past week, indicating that investors might be rushing to centralized entities to book profit, further adding credence to the short-term bearish outlook.
ETH supply on exchanges
Referring to the Supply Shock on-chain metric, Willy Woo, a popular on-chain analyst, mentioned in his recent newsletter,
Ethereum’s fundamental demand and supply has not been climbing as much compared to Bitcoin.
He also adds that this is the region of historical strength, further indicating that the long-term outlook for both BTC and ETH remains bullish.
ETH, BTC supply shock chart
If Ethereum price drops below $2,765 and produces a decisive close below it, it would create a lower low, invalidating the bullish thesis. In this case, ETH might bounce off the demand zone, ranging from $2,442 to $2,605, and give the uptrend another shot.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Follow us on Telegram
Stay updated of all the news
Bitcoin likely to remain in red through the next quarter if history is any indication
Bitcoin (BTC) price produced a monthly close at $27,210, noting a -6.92% return for May. The last-minute slide in BTC put an end to the four-month bullish streak that kickstarted the 2023 rally.
Ethereum vs. SEC: Implications of Wahis’ insider trading settlement on ETH
Ethereum (ETH) is the subject of a new controversy, with the second-largest crypto finding itself in the rut after the United States Securities and Exchange Commission (SEC) settled its insider trading case against the Wahi brothers.
Justin Sun’s TRON hits all-time high of 10.9M daily transactions, braving crypto winter
Justin Sun, the founder of TRON – one of the largest decentralized blockchain DAO ecosystems in crypto – shared a new milestone for the token on Thursday. TRON processed 10.9 million in daily transactions, hitting a record high.
Ethereum fees decline by 70% from 2023 highs as top DeFi protocols lose users
Ethereum is currently facing trouble in the spot market due to the broader market bearishness as well as investors' skepticism. But while the spot market only recently took a turn for the worse, the DeFi space has been only negative for a long time.
Bitcoin: BTC delays inevitable crash to $25,000
Bitcoin price is delaying a crash that has been brewing for roughly two weeks. A failure to push higher could result in a steep correction next week. The troubling macroeconomic conditions could be key in catalyzing and trigger a nosedive for BTC holders.