Ethereum Faces 25% Drop Without Key Trendline Breakthrough Amid Ongoing Investor Accumulation

Ethereum Exchange-Traded Funds (ETFs) experienced a positive turn with $5 million in net inflows, marking a shift from the recent outflows observed in the Grayscale Ethereum Trust. This trend indicates a growing interest among investors in accumulating Ethereum, as evidenced by reduced outflows and diminishing reserves on ETH exchanges.

Technical indicators for Ethereum suggest a potential 25% decline, bringing its price closer to the $2,000 psychological threshold. Despite this projection, investors’ ongoing accumulation of Ethereum may counterbalance the market dynamics due to significant on-chain metrics.

On Monday, Ethereum ETFs registered minor net inflows of $5 million, as reported by Farside Investors. Notably, this inflow followed a series of consecutive days of net outflows across nine US spot ETH ETFs. Among these, Grayscale Ethereum Trust (ETHE) showed no flows, a departure from its previous outflow trend since the inception of ETH ETFs. Fidelity’s FETH led the way with $4 million in net inflows, while Bitwise’s ETHW recorded $2.9 million in inflows. Conversely, VanEck’s ETHV experienced net outflows for the first time, with a loss of $2.9 million.

Additionally, data from CryptoQuant reveals that Ethereum has witnessed a net exchange outflow exceeding 306,000 ETH following the market downturn on August 5. The decline in ETH’s exchange reserves to a one-month low of 16.8 million ETH, starting from August 2, signifies a downward trend. A decrease in exchange reserves typically indicates heightened buying pressure among investors.

The collective increase in ETH net exchange outflows and the diminishing exchange reserves suggest a strategic accumulation of ETH by investors in anticipation of a potential price surge.

In terms of technical analysis, Ethereum is currently trading around $2,710, reflecting a 2% increase for the day. Over the past 24 hours, liquidations in excess of $27 million have been observed, with long and short liquidations accounting for $16.29 million and $11.28 million, respectively. The cautious market sentiment is mirrored in Ethereum’s price action, with a prevailing downside bias.

The rejection around the $2,730 mark, slightly above the key resistance level of $2,723, indicates a potential 25% decline for Ethereum, targeting a swing low near $2,020 before a potential rebound. Historical patterns suggest that the $2,020 price level could serve as a critical point for assessing seller exhaustion and a subsequent rally in the weeks ahead.

Furthermore, technical indicators such as the Stochastic Oscillator (Stoch) and Fibonacci retracement levels signal potential support areas for Ethereum’s price movement. The %K line of the Stoch, currently at 48, hints at a short-term bearish sentiment. Meanwhile, the Fib retracement suggests that ETH could find support around the 23.6% level, approximately at $2,453. Monitoring Ethereum’s performance relative to these technical indicators will provide insights into its future price trajectory.