Key Insights
- Ethereum price has rebounded to its highest level in months.
- Data shows that spot Ethereum ETFs added $697 million this week.
- Technicals show that it has just formed a golden cross pattern.
Ethereum price jumped to its highest level in months as sentiment in the crypto industry gained steam. ETH peaked at $2,548, its highest level since January this year, up by 70% from its lowest level this year. This rally may continue in the coming months, helped by the ongoing ETF inflows.
Ethereum Price Prediction Technical Analysis
The daily chart shows that the ETH price has jumped in the past few months, moving from the year-to-date low of $1,514 in June to a high of $2,548. It has moved slightly above the important resistance level of $2,420, its highest swing in April this year.
A closer look shows that it has formed a golden cross pattern, which forms when the 50-day and 200-day Weighted Moving Averages (WMA) cross each other. This pattern normally confirms a bullish breakout over time.
The Relative Strength Index (RSI) has continued rising and is now in the overbought level of 78. That is a sign that it is gaining momentum.
Therefore, the token will likely continue rising in the coming days or weeks. If this happens, the next key target to watch will be at $3,000, which is about 25% above the current level. On the flip side, a drop below the support of $2,000 will invalidate the bullish outlook.
Ethereum Gains Have Been Supported by Crypto Market Rally
The main catalyst for the ongoing Ethereum price rally is mostly because of the ongoing crypto market rally that started earlier this week. Bitcoin price has jumped to $77,000, while top tokens like XRP, Solana, and BNB have jumped by double digits in the last few months.
The rally was triggered by a decision by the Treasury Department to intervene in the bond market. This happened after the 30-year bond yield jumped to the highest level in over two decades. The department announced that it was increasing its buyback, which drove the yield down sharply, before it bounced back.
The activity led to a substantial demand for alternative assets, including gold and silver. For example, the spot ETH ETF inflows jumped by $697 million this week.
ETH price is also rising as investors react to the ongoing risk-on sentiment as evidenced by the rising Crypto Fear and Greed Index. This index jumped to the greed zone of 76, its highest level in months. In most cases, cryptocurrencies do well when the index is in an uptrend.
Meanwhile, there are signs that whales have been accumulating Ethereum in a well-timed dollar-cost averaging (DCA) approach. One of these whales has been Tom Lee, whose BitMine has bought nearly 6 million coins in the last 12 months. He intends to hold these coins in the foreseeable future and make staking revenue in the process.
These activities have led to a surge in Ethereum demand. CoinMarketCap data shows that the 24-hour volume has soared by 10% to over $33 billion. The same happened in the futures market, where the futures open interest has jumped to over $30 billion, its highest level since May. A soaring open interest at a time when the funding rate is rising is a sign of more demand.
These activities likely explains why the amount of ETH tokens in exchanges has continued falling this month. It dropped to 12 million coins, much lower than last July’s high of 17.7 million. Falling ETH tokens in exchanges is a sign that investors are moving their coins from exchanges to self-custody.
The main risk that Ethereum faces today is that the ongoing rebound will be a dead-cat bounce (DCB). A DCB is a situation in which assets jump sharply and then resume the downward trend.
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