Share:
  • Ethereum price hints at a bullish move to $3,700 in two scenarios.
  • Investors can expect this uptrend to occur if the $3,129 hurdle can be flipped into support.
  • A daily candlestick close below $2,439, however, will invalidate the bullish thesis for ETH

Ethereum price recovery after the recent stint indicates that the bulls are back in business. The technicals and on-chain metrics have aligned and are signaling a recovery rally soon.

Ethereum price ready for a u-turn

Ethereum price action since September 19, 2021, could be read as developing a massive triple bottom setup. At the time, ETH created a swing low at $2,652 after a 34% crash. This downswing was followed by an 83% upswing in under two months to set an all-time high of $4,868.

Eventually, the market structure of cryptocurrencies deteriorated, leading to profit-taking that caused Ethereum price to crash 55% and deviate below the September 19, 2021, swing low at $2,652.

From a one-day time frame perspective, these two swing lows hint at a potential triple bottom setup.

A retest of the $2,652 support level again will complete this bottom reversal pattern and kick-start a massive run-up to the all-time high at $4,868. However, this move is yet to be confirmed and so, investors need to keep this in the back of their minds.

ETH/USDT 1-day chart

ETH/USDT 1-day chart

A more realistic outlook on how things will play out for Ethereum price is a bounce off the $2,800 to $3,000 support cluster followed by a decisive move above the 50-day SMA at $3,035 and the 2022 volume point of control at $3,129.

Producing a daily candlestick close above the aforementioned resistance levels will reveal the bulls’ strength and intentions to push higher. In such a case, ETH could rally 12% to retest the 200-day SMA at $3,476.

It is worth noting that ETH price might extend higher and fill the low-volume node at $3,703, bringing the total run-up to 25% from the current position at $2,990. Although unlikely, a retest of $4,000 could form a local top for Ethereum price.

ETH/USDT 1-day chart

ETH/USDT 1-day chart

The bullish outlook is supported by the accumulation trend of whales holding between 10,000 to 100,000 ETH. This category of investors has historically bought the dips, which have resulted in massive returns.

For instance, these wallets increased their holdings from 25.07% to 26.25% of Ether’s circulating supply as prices crashed from roughly $4,000 to $2,700 in September 2021. Similarly, buy-the-dip trends can be spotted between late December 2021 and early January 2022 and the ongoing downswing.

The recent downswing appears to have been welcomed as a buy signal for whales as they increased their holdings by 1.94%, which could likely help Ethereum price pop higher.

ETH supply distribution

ETH supply distribution

Adding a tailwind to this bullish outlook is the increase in the volume of ETH outflows from trading platforms seen in the exchange net position change indicator. This index tracks the 30-day outflow of ETH and shows that nearly 1.5 million ETH has moved out of centralized entities’ wallets as of April 13, suggesting strong conviction among institutional investors and an effective reduction in sell-side pressure. 

Such a massive outflow has only occurred six times in the entirety of Ethereum’s history.

ETH net exchange position change 

ETH net exchange position change 

While the technicals and on-chain metrics are hinting at a bullish future, the first possibility, aka the triple bottom setup has a much more reliable outcome while the second one, where Ethereum price continues to rally from its current position will likely be a short-term uptrend.

Regardless of which scenario takes place, a decisive daily candlestick close below $2,439 will produce a lower low from a high time frame perspective and invalidate the bullish thesis. 

In this case, the bears could take charge and catalyze a 30% crash to $1,706, which will allow market makers to collect the sell-stop liquidity from traders who opened long positions in July 2021.

 

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.

Join Telegram

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended Content

Editors’ Picks

XRP price loses its 25% month-long uptrend as Ripple CTO calls buyback proposal a “scam”

XRP price loses its 25% month-long uptrend as Ripple CTO calls buyback proposal a “scam”

XRP price recovery over the month of January has been rather dull in comparison to the rest of the large-cap cryptocurrencies, such as Ethereum and Solana.

More Ripple News

Here is why falling bond prices this Monday are of importance for the Polygon price later this week

Here is why falling bond prices this Monday are of importance for the Polygon price later this week

Polygon (MATIC) price tanked slightly around the US opening bell as markets are still pricing in the turn of events from past Friday on the back of the US jobs report. 

More Polygon News

Will Bitcoin bulls remain in control of BTC price after another volatility-filled week?

Will Bitcoin bulls remain in control of BTC price after another volatility-filled week?

Bitcoin price witnessed a massive rally in January 2023, and sustained above the $23,000 level while facing macroeconomic headwinds. Another week of catalysts could test the resolve of bulls as BTC price remains firmly the two-year lows of the bear market at $22,800. 

More Bitcoin News

Can the bond market sell-off negatively impact Binance Coin price?

Can the bond market sell-off negatively impact Binance Coin price?

Binance Coin (BNB) price must see quite a few crypto traders puzzled this morning when looking at the charts. With several cryptocurrencies slipping lower, the risk is increasing that cryptocurrencies are lagging on the overall market reaction.

More Binance Coin News

Bitcoin: Nonfarm Payrolls on the radar after Powell’s speech propels BTC higher

Bitcoin: Nonfarm Payrolls on the radar after Powell’s speech propels BTC higher

Bitcoin (BTC) price is at an inflection point as it continues to rally amid multiple sell signals on lower time frames. The Nonfarm Payrolls (NFP) report, including the unemployment rate and average hourly earnings, is set to be announced on February 3 at 1330 GMT.

Read full analysis

BTC

ETH

XRP