Ethereum Bulls Show Strength with Strong Buying Activity Following Black Monday Drop
Ethereum, a prominent cryptocurrency, saw a surge of 2% on Tuesday as both traditional and crypto-savvy investors seized the opportunity to acquire ETH following a significant drop in value triggered by Black Monday’s market sell-off. This resurgence in interest suggests that Ethereum may have hit a low point and is poised for a potential upswing, aiming to reclaim the critical $2,803 support threshold.
The market dynamics indicated a notable response from investors, with a visible uptick in buying activity across various investor segments. In the traditional financial realm, while Bitcoin ETFs experienced outflows, Ethereum ETFs defied the trend by attracting $48.73 million in net inflows on Monday, marking only the third instance of such positive activity since their inception.
Grayscale Ethereum Trust (ETHE) witnessed a reduction in asset outflows, reaching $46.8 million, the lowest since the launch of ETH ETFs. Conversely, BlackRock’s ETHA and Fidelity’s FETH received $47.1 million and $16.2 million in inflows, respectively, while Van Ecks’ ETHV observed its most substantial buying day with $16.6 million in inflows.
Additionally, crypto-native investors demonstrated their confidence in Ethereum by capitalizing on the price dip, as evidenced by a total exchange net outflow of 152.4K ETH, the highest since June 12. This movement coincided with a decrease in ETH exchange reserves, indicating a shift towards heightened buying activity among investors.
During the market downturn, five large addresses collectively purchased 144,071 ETH, equivalent to over $331.11 million, signaling substantial confidence in Ethereum’s potential for recovery. However, some community members expressed concerns that the surge in buying activity might primarily stem from short-term profit-seeking motives rather than long-term investment strategies.
Furthermore, Ethereum experienced a surge in trading volume across spot and futures markets, reaching levels not seen since May 2021. The heightened network activity led to a rise in gas fees, resulting in the burning of 5,222.45 ETH, the most significant burn since March 14, as per Etherscan data.
In terms of technical analysis, Ethereum’s current price of around $2,500 reflects a 2% increase, indicating a degree of stabilization following the market turmoil on Monday. While certain indicators suggest a prevailing bearish sentiment, such as the Moving Average Convergence Divergence (MACD) and the 50-day SMA, the Relative Strength Index (RSI) hints at a potential bottoming out and a subsequent rebound for Ethereum.
In conclusion, the confluence of on-chain and ETF buying pressure, along with technical indicators, suggests that Ethereum could target the $2,803 support level and potentially rally towards the upper resistance at $4,093, barring a breach of the $2,100 support level. This scenario highlights the resilience and potential for recovery within the Ethereum ecosystem.
