Key Points
- Ethereum (ETH) shows signs of recovery, possibly due to increased demand from whales.
- ETH’s short-term momentum could push it towards the $2,800 to $2,900 price range.
Ethereum (ETH) is demonstrating signs of recovery after a period of struggle to maintain a bullish stance. This improvement may be attributed to the overall positive market sentiment and a specific factor that seems to be fueling the Ethereum bulls.
Bitcoin Dominance and Ethereum Price
A strong correlation between Bitcoin’s dominance and Ethereum’s price decline has been observed for several months. The BTC.D chart has reached a year-to-date high of 58.59%. However, Ethereum is regaining its bullish momentum as BTC.D begins to decline, suggesting a shift in liquidity flows towards altcoins, with Ethereum reaping the benefits.
The recent rally witnessed Ethereum bulls leading with a 16% increase in the past week, following weeks of struggle to break free from its local bottom range. Metrics show that whales have been proactively leading this rally, with their balances growing since the beginning of September.
Ethereum Whales and Market Inflows
Historical concentration data reveals that as of September 1st, Ethereum whales held 58.12 million ETH. By September 23rd, this balance had grown to 58.48 million coins, a growth of approximately 360,000 coins in about three weeks, equivalent to $949.68 million at the current market value.
Large holder inflows have also seen growth in the past few days. For instance, inflows jumped from 101,740 coins on September 14th to 675,000 coins by September 19th. The inflows continued to rise from below 96,000 ETH on September 22nd to over 515,000 ETH on September 23rd.
Large holder outflows, on the other hand, saw their highest spike this month between September 18th and 19th, when they increased from 150,340 coins to almost 590,000 coins. As of September 23rd, outflows were at 241,000 coins. Therefore, address inflows (demand) were higher than sell pressure.
Future of Ethereum’s Bullish Momentum
Ethereum’s current bullish run could be seen as a sign of recovery. Traders may expect it to continue rallying, but a continuous rally may not be realistic. Short-term momentum could push Ethereum closer to the $2,800 to $2,900 price range, a zone that has previously acted as support and resistance. If the price pushes into this range, it could face resistance due to increased likelihood of profit-taking and increased sell pressure.
Ethereum’s RSI was at 60.03 at press time, indicating it was not yet overbought. This suggests that once Ethereum enters the aforementioned price range, there could be more sell pressure due to profit-taking.