Ethereum’s price has hit a plateau this month, causing cryptocurrency investors to take a cautious stance, but several key factors could drive a price increase in the near future.
Ethereum (ETH), the second-largest cryptocurrency, was trading at $2,700 on Tuesday, marking a 35% decline from its peak in November. This current price level is particularly significant as it mirrors its trading price on the same date in 2024.
Several bullish catalysts may propel Ethereum’s price upwards in the coming months. Notably, recent data reveals a steady influx of capital into spot Ethereum ETFs from institutional investors, with daily inflows recorded on 7 out of 10 days this month, bringing the total to $3.15 billion since their inception.
In addition, recent CoinGlass data indicates that Ethereum balances held on centralized exchanges have dropped recently, now standing at 15.34 million coins, down from a high of 16.2 million earlier this month. This decline suggests that a significant number of ETH holders are opting to retain their assets in self-custody rather than selling.
Furthermore, the Ethereum network is showing increased activity, approaching parity with Solana (SOL) in decentralized exchange transactions. Ethereum protocols processed over $2.28 billion in the last 24 hours, while Solana faces scrutiny following multiple meme coin rug pulls, including a recent incident involving a coin named Libra.
Strong Technical Outlook for Ethereum Price
Short-term technical charts indicate a potential bearish trend for Ethereum after a death cross pattern emerged, where the 50-day moving average crosses below the 200-day moving average.
However, a detailed analysis of longer-term charts suggests a possible rebound for Ethereum. The weekly chart reveals that the accumulation and distribution indicators are on the rise, showing continued investor interest and accumulation of the cryptocurrency.
The formation of an ascending triangle pattern, characterized by an upward trendline and a horizontal resistance level, indicates that a bullish breakout could occur as these lines converge. Additionally, Ethereum has formed a megaphone pattern, further supporting bullish sentiment.
It is important to note that bullish breakouts, particularly on weekly charts, can take time to materialize, often requiring months or even over a year. A breakout above the upper resistance of the triangle, currently located at $4,061, could signal further gains, potentially reaching the previous all-time high of $4,945 and possibly targeting $5,000.
Disclosure: This article does not constitute investment advice. The information provided is for educational purposes only.
