Cryptocurrency news

Ethereum Price Analysis: Bullish Breakout Toward $4K More Likely for ETH

CryptoPotato / 24.07.2024 / 14:27
Ethereum Price Analysis: Bullish Breakout Toward $4K More Likely for ETH

Ethereum’s price has been consolidating above the 100—and 200-day moving averages, indicating a bullish trend.

Given the launch of spot ETH ETFs, upward momentum targeting the wedge’s upper boundary is anticipated in the mid-term.

Technical Analysis

By Shayan

The Daily Chart

A close examination of Ethereum’s daily chart reveals that after breaking above the critical 100-day moving average at $3,354, it entered a period of sideways fluctuation, with the price lacking clear direction.

This phase confirms the breakout and suggests an equilibrium between buyers and sellers in the market.

However, with the official launch of spot ETH ETFs and a net inflow of $106.6 million on their first day, an increase in buying interest for Ethereum is expected, paving the way for a continuation of the bullish rally. In this scenario, the primary target for buyers is the wedge’s upper boundary at $3.7K.

In summary, the price is confined within a crucial range, bounded by the wedge’s upper boundary ($3.7K) and significant support at $3.4K. A bullish breakout seems more likely.

Source: TradingView

The 4-Hour Chart

On the 4-hour chart, Ethereum buyers have struggled to breach the previous major swing high of $3.5K due to prevailing selling pressure, resulting in a period of sideways consolidation.

During this consolidation, the price has formed an ascending wedge pattern.

Typically, this pattern suggests a bearish reversal. However, given the bullish sentiment in the market, a resurgence in demand is expected, potentially leading to a break above the wedge.

Yet, in the event of an unexpected bearish breakout, the price could enter a short-term retracement phase before embarking on the next impulsive bullish move. This bearish scenario might offer a better opportunity for participants to accumulate ETH at lower prices.

Source: TradingView

Onchain Analysis

By Shayan

With Ethereum’s price recovering from below the $3K mark and the official launch of ETH Spot ETFs, analyzing the behavior of investors using on-chain metrics can provide insights into the reasons for the recent recovery and indications for future trends.

The chart below displays 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 to exchanges, likely for selling. Conversely, a decrease suggests accumulation by holders, as coins are withdrawn from exchanges for long-term storage.

Recent data reveals that the exchange reserve metric has been dropping rapidly in recent weeks, particularly following the news of the potential launch of Spot ETFs in July. This trend indicates that many large investors have taken advantage of the recent market correction to buy the dip. These investors are now withdrawing their coins from exchanges, reducing the available supply and signaling long-term holding intentions. This reduction in available supply, coupled with increasing buying interest driven by the launch of Spot ETFs, sets the stage for a potentially sustainable rally in the coming months.

Source: CryptoQuant
Source
Recently News

© Token Radar 2024. All Rights Reserved.
IMPORTANT DISCLAIMER: All content provided herein our website, hyperlinked sites, associated applications, forums, blogs, social media accounts and other platforms (“Site”) is for your general information only, procured from third party sources. We make no warranties of any kind in relation to our content, including but not limited to accuracy and updatedness. No part of the content that we provide constitutes financial advice, legal advice or any other form of advice meant for your specific reliance for any purpose. Any use or reliance on our content is solely at your own risk and discretion. You should conduct your own research, review, analyse and verify our content before relying on them. Trading is a highly risky activity that can lead to major losses, please therefore consult your financial advisor before making any decision. No content on our Site is meant to be a solicitation or offer.