Ethereum Approaches $2.800: Rally Or Correction?

Ethereum has made notable gains over the past week. The ETH course shot up by more than 40%. This strong increase is due to the increasing inflow of spot ETFs and the effects of the recent Pectra upgrade. However, there are also signs that a period of consolidation is approaching.

Fundamental figures under the microscope

Spot ETF flows for Ethereum are showing clear growth, which is often a precursor to a new bull market. Additionally, reserves on exchanges continue to decline, which usually indicates accumulation. Investors appear to be pulling their ETH from trading platforms to hold for the long term, which usually signals positive market expectations.

However, caution is advised. The ‘percent supply in profit’ indicator shows that a large portion of Ethereum’s inventory is currently in the positive. While this has not yet reached the critical 95% threshold that often signals overheated market conditions, it is clear that short-term holders may want to protect their profits if the price continues to rise.

Technical resistance around $2.800

On the weekly chart, we can see that the Ethereum price is approaching a crucial zone between $2.760 and $2.900. In the past, this level has acted as both resistance and support on multiple occasions. The price is currently trading below this level, around $2.560. While there is room for further upside, the $3.000 level will not be reached without a fight.

The liquidation heatmap for ETH shows that there are significant liquidity zones around these price points. These zones pull the price up, but many traders may choose to realize their profits once these levels are reached, which could slow the upward movement.

The current rally is impressive, but it remains to be seen whether ETH can break the $3.000 mark right away. Given the current market dynamics, a period of consolidation seems likely, with the price potentially holding below $3.000 for a while before another major move higher. However, the crypto market is unpredictable. We have seen before that buyers sometimes give little chance to get in late, so it is important to be prepared for any scenario. For now, a consolidation in the sub-$3.000 zone seems most likely.

Frequently Asked Questions

Why has the ETH price risen so much over the past week?
The increase in the ETH price is mainly due to increasing spot ETF flows and the positive impact of the recent Pectra upgrade.

What does the decline in stock market reserves mean?
The decline in reserves on exchanges indicates that investors are pulling their ETH from trading platforms and wanting to hold on to it for longer, which could be a bullish signal.

What can we expect from the ETH price in the short term?
Given the current market dynamics, a consolidation is likely, with the price possibly temporarily holding below $3.000 before another strong upward move can take place.