Bullish breakout towards $4000 more likely for ETH

Ethereum price has consolidated above the 100- and 200-day moving averages, indicating an uptrend.

Given the launch of the spot ETH ETFs, an upward momentum is expected towards the upper boundary of the mid-term wedge.

By Shayan

The daily chart

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

This phase confirms the break and suggests a balance 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 the first day, an increase in Ethereum buying interest is expected, paving the way for a continuation of upward recovery. In this scenario, the main target for buyers is the upper limit of the wedge at $3.7 thousand.

In short, the price is confined to a crucial range, bounded by the upper limit of the wedge ($3.7K) and significant support at $3.4K. A bullish breakout looks more likely.

Source: TradingView The 4-hour chart

On the 4-hour chart, Ethereum buyers have struggled to break the previous $3.5K high due to prevailing selling pressure, leading to 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 market sentiment, a resurgence of demand is expected, which may lead to a break above the wedge.

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

Source: TradingView

By Shayan

With the price of Ethereum recovering below the $3,000 mark and the official launch of Spot ETH ETFs, analyzing investor behavior using on-chain metrics can provide insight into the reasons for the recent recovery and indications for 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 usually indicates that investors are depositing their coins on exchanges, probably to sell them. Conversely, a decrease suggests hoarding by holders as coins are withdrawn from exchanges for long-term storage.

Recent data reveals that the exchange reserve metric has been falling rapidly in recent weeks, particularly following 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 withdrawing their coins from exchanges, reducing the available supply and signaling intentions to hold for the long term. This reduction in available supply, coupled with increased buying interest driven by the launch of spot ETFs, sets the stage for a potentially sustainable recovery in the coming months.

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