After facing some selling pressure last week, the Ethereum (ETH) price seems to be stabilizing around $3,700. On the other hand, the Ethereum on-chain indicators continue to show strength hinting at buying pressure on the upside.
Surge in Ethereum Whale Addresses
Crypto analyst Ali Martinez has highlighted a significant rise in the number of Ethereum addresses holding 10,000 or more ETH, which has increased by 3% over the past three weeks. This uptick signals a notable spike in buying pressure for Ethereum.
Courtesy: Ali Martinez
On-chain data from Santiment reveals that enthusiasm for Ethereum surged following the SEC’s approval of Ethereum ETFs. Despite this initial excitement, social sentiment has now stabilized, which is considered an ideal state ahead of the commencement of trading for these new Ethereum financial products.
ETH Price Action Ahead
On the other hand, some market analysts believe that the ETH price is forming chart patterns similar to that in 2021, after which it rallied by a staggering 83%. In a recent analysis, noted analyst Caled Frazen drew attention to the striking similarities between Ethereum’s current price action and its performance in 2021.
While cautioning against expecting an exact repetition of historical patterns (“history rhymes, but it doesn’t repeat”), Frazen emphasized the significance of the observed parallels. Frazen noted that in the 2021 cycle, the “red zone” served as a crucial level. Although it wasn’t flawless support, it proved significant enough. Following a failed breakdown, Ethereum witnessed a remarkable rally of +83% within 50 days.
Courtesy: Caleb Franzen
Based on the Coinglass chart depicted above, Ethereum (ETH) open interest witnessed a decline from $16.97 billion recorded on June 6 to reach $16.35 billion as of the latest update on June 9, marking a decrease of $620 million.
Despite ETH’s price experiencing a 7.38% dip from its weekly peak on June 6, the reduction in open interest was comparatively moderate, contracting by only 3.65%—almost half of the price decline.
A deceleration in open interest reduction relative to price decline amid a market downturn can potentially be interpreted as a bullish recovery signal for two significant reasons.
Courtesy: Coinglass
In the event that Ethereum ($ETH) breaches the support threshold at $3650, there’s a possibility of a downturn toward $3152, marking the previous Fair Value Gap (FVG).
Should Ethereum manage to hold steady at the $3650 mark, it could signal a potential upward trajectory towards $4000. Furthermore, surpassing the resistance barrier at $4000 might instigate a robust bullish surge targeting the $6000-$7000 range.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
