Ethereum Price Set to Surge as Institutional Demand Reaches All-Time High
Over the weekend, the cryptocurrency market experienced a lackluster performance as both Bitcoin (BTC) and Ethereum (ETH) displayed neutral candle formations on their daily charts, signaling a balance between buyers and sellers. Despite this, there is a potential for Ethereum to rebound, especially after the introduction of U.S.-listed Exchange-Traded Funds (ETFs). Currently, Ethereum’s price, supported by the 200-day Exponential Moving Average (EMA), is looking to stabilize its ongoing correction.
Ethereum, the second-largest cryptocurrency, saw a significant decline this week following the launch of ETFs. After reaching a high of $3350, the asset dropped by nearly 8% to trade at $3275, with a market cap of $393.8 billion. The 200-day EMA is currently providing some stability amidst a recent sell-off, although a bearish crossover between the 20-day and 100-day EMAs, coupled with an outflow from Grayscale Ethereum Trust ETF (ETHE), could increase selling pressure.
The ADX slope, indicating bearish momentum in Ethereum’s price forecast, suggests the potential for a prolonged correction. If the selling pressure persists, Ethereum’s price could decline by another 13.5% to $2800, seeking support from the lower trendline of a bull flag pattern that has been consolidating prices within two converging trendlines for the past four months.
The flag pattern, often observed during significant bull runs, presents an opportunity for buyers to rejuvenate bullish momentum for the next upward movement. Furthermore, IntoTheBlock reported a notable increase in large transaction volumes for Ethereum despite its price decline, particularly following the release of Ethereum ETFs. This surge in transaction volume indicates a growing institutional interest in and demand for the cryptocurrency.
As a result, Ethereum’s price seems poised for a bullish reversal, potentially pushing the asset towards $3800-$3750 and challenging the resistance of the flag pattern. A breakout from the overhead trendline could reignite the existing uptrend and encourage buyers to target the $5600 level.
In conclusion, while Ethereum faced a correction after the debut of spot ETH ETFs, similar pullbacks were observed in Bitcoin’s past post-ETF movements, suggesting a temporary market adjustment to eliminate weak positions. Historically, Bitcoin rallied in February to achieve new all-time highs, paving the way for notable growth in Ethereum in the subsequent month.
