Ethereum Approaches Key Support Level, Signaling Possible Reversal
Ethereum, the second-largest cryptocurrency, is at a pivotal juncture as traders and investors gear up for Q4 2024 amid market uncertainties. Recent analysis of the ETH/USDT pair has unveiled a cumulative volume delta (CVD) divergence. This divergence is significant as it indicates a potential price reversal for Ethereum.
The CVD divergence is a result of ETH prices reaching equal highs while CVD forms lower highs, signaling weak buying pressure. This scenario suggests that Ethereum might experience price fluctuations in the near future. If the orderbook depth remains constant, ETH could see lower highs, but an increase in depth could lead to higher prices.
Currently, ETH/USDT is hovering around a critical support level, forming a broadening ascending wedge on higher timeframes. The formation of a double bottom pattern along the ascending trendline could signal an upward movement. However, a breach below this support level may trigger further price declines.
On the daily chart, Ethereum is also shaping a double bottom at the $2,100 mark, indicating a crucial point for potential recovery. A rate cut could potentially catalyze Ethereum’s bounce in Q4, aligning with the trend observed in other cryptocurrencies in recent years.
The mega whale address count, representing holders with over 10K ETH, has been steadily decreasing, suggesting waning confidence among large investors. These whales have stopped accumulating ETH since early July, opting to sell or redistribute their holdings. Despite this, the CVD divergence hints that the correction phase might be nearing its end. However, the continued decline in mega whale addresses poses a challenge to any substantial price reversal.
Open Interest-Weighted (OI-Weighted) Funding Rates for Ethereum, analyzed using Coinglass, have shown an increase in green numbers. Rising OI-Weighted Funding Rates typically indicate growing trader interest in Ethereum, hinting at a bullish outlook for the long term. This resurgence in trader activity could set the stage for a potential price rebound for ETH as it approaches a critical zone that could dictate its future trajectory.
Furthermore, Ethereum’s mainnet fees have significantly decreased by over 30x in the past six months. While concerns about Ethereum’s long-term viability have emerged, the network benefits from collecting fees from its Layer 2 solutions, boosting overall network activity. Lower mainnet fees offer a favorable environment for traders who previously avoided ETH due to high costs.
In conclusion, the launch of Ethervista, similar to Solana’s Pump.Fun, could play a pivotal role in Ethereum’s price movement by enhancing liquidity for ETH-based memecoins. This development positions Ethereum for potential growth in Q4 2024, setting the stage for an intriguing period ahead for the cryptocurrency.
