Ethereum is showing signs of a potential 20% rally thanks to increased buying pressure from traditional investors through Ethereum ETFs. However, it may face resistance from a key trendline and a potential dump by an old whale who has been selling off large amounts of ETH.
Last week, Ethereum ETFs saw a net inflow of $155 million, the highest among all digital assets, indicating that traditional investors took advantage of the price correction to buy ETH at lower prices. BlackRock’s iShares Ethereum ETF (ETHA) is also on track to reach $1 billion in cumulative net inflows, crossing $900 million last week.
While the inflows from ETH ETFs are positive for Ethereum’s price, there are still some old whales disposing of their holdings. One whale recently deposited 5,000 ETH worth $13.2 million to the OKX exchange, potentially adding to a total sale of 48,500 ETH worth $154 million since July. This whale acquired 1 million ETH during Ethereum’s ICO at a price of $0.31 and currently holds 303.5K ETH across two wallets.
On-chain metrics show mixed signals for ETH. The 30-day Market Value to Realized Value (MVRV) Ratio indicates that investors who bought ETH within the last month are at an average loss of 9%. Additionally, ETH’s Weighted Sentiment is slightly negative at -0.2%, suggesting a low sentiment toward the altcoin. However, these metrics also indicate that ETH may still be in the buy zone if a rally occurs.
From a technical analysis perspective, Ethereum is trading around $2,660 and has experienced $55.71 million in liquidations in the past 24 hours. It is attempting to break through the $3,723 resistance level, which it has rejected twice in the past week. This resistance coincides with a trendline that suggests a potential decline to around $2,020. On the other hand, indicators such as the RSI and Stochastic Oscillator show increased bullish momentum, suggesting a shift in favor of buyers.
Furthermore, Ethereum’s futures open interest (OI) has increased over 4% to nearly $11 billion, and the ETH Long/Short Ratio has risen to 1.01. These factors indicate the potential for further growth. If the rally continues, ETH could reach around $3,368, where it will encounter a key resistance level. However, if ETH falls below the support level of $2,020 and breaks the trendline, the bullish thesis will be invalidated.