Connect with us

Ethereum

Bulls Must Hold $2,500, Spot ETF To Catalyze Demand

Published

on

Dall·e 2024 08 20 16.32.42 A Digital Illustration Exploring The Potential Bullish Turn For Ethereum As Suggested By On Chain Metrics. The Image Features The Ethereum Symbol Wit.jpg


Ethereum, similar to most altcoins, is under significant selling pressure, struggling to shake off the weakness of early August. Even though there were flashes of strength after the climactic sell-off on August 5, prices are still below $2,800.

The only positive for now, at least looking at the daily chart, is the impressive bulls’ resilience. Despite the wave of lower lows, buyers have soaked in the deluge of selling pressure, holding prices above the $2,500 mark.

The bearish formation, nonetheless, remains, but one analyst thinks the rejection of lower prices below $2,500 is critical.

Ethereum Bulls Must Keep Prices Above $2,500

In a post on X, the analyst said that bulls must hold Ethereum above $2,500 for the uptrend to remain. The round number, looking at price evolution in the daily chart, marks the base of the bull flag.

Advertisement

Related Reading

In the past few trading days since the spike on August 8, Ethereum has been trending below the $2,700 and $2,800 resistance zones. At the same time, support remains clearly at $2,500. As price action consolidates, a bull flag has formed, signaling strength.

ETH bulls must find support at $2,500 | Source: @CryptoMichNL via X
ETH bulls must find support at $2,500 | Source: @CryptoMichNL via X

According to the analyst, if buyers keep $2,500 as their anchor, Ethereum is set to fly, reaching $3,150 in the next session. The recovery is welcomed, considering that the sell-off of August 1 through 5 was a bearish breakout formation. This sell-off breached the critical support zones of April to July 2024.

Ethereum price moving sideways on the daily chart | Source: ETHUSDT on Binance, TradingView
Ethereum price moving sideways on the daily chart | Source: ETHUSDT on Binance, TradingView

Impact Of Spot ETFs and Ecosystem Growth

The leg up, the analyst added, would likely be driven by inflow into spot Ethereum ETFs. Since approving spot ETFs in July, institutions have been keen to find exposure.

Taking to X, one ETF analyst notes that inflows now exceed $2 billion, excluding the outflows from Grayscale’s ETHE. During this period, BlackRock’s iShares Ethereum ETF has been driving demand.

Beyond the inflow from spot Ethereum ETFs, Vitalik Buterin thinks there has been positive progress that may prop up prices. Among these is the drop in gas fees in the mainnet and via layer-2 solutions like Base.

Related Reading

Advertisement

Moreover, the co-founder noted that decentralization efforts by Arbitrum and Optimism is massive. Arbitrum and Optimism recently announced their fault-proofs. However, Optimism reverted to a centralized fault-proof system after an audit report, allowing flaws to be fixed.

Feature image from DALLE, chart from TradingView



Source link

Advertisement
Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Copyright © 2024 creamofcrypto.com