The rising demand for Ethereum, as shown by notable cash inflows to US spot Ether ETFs in the recent past, is a major boost for the ongoing bullish outlook.
Amid the expected crypto rebound in the second half of October and the rest of the fourth quarter, Ethereum ETH $3 101 24h volatility: 1.8% Market cap: $374.28 B Vol. 24h: $23.15 B price has gradually gained bullish momentum in the past few weeks. The leading altcoin, with a fully diluted valuation of about $315 billion and a daily average traded volume of around $12.7 billion, has surged over 9 percent in the past week to trade around $2,623 on Friday, October 18, during the mid-London session.
As a result, Ether price against the US dollar has approached a crucial resistance level that could either yield a breakout or a rebound in the near term. From a technical analysis standpoint, Ether’s price is aiming at $2,800, which coincides with the daily 2.618 Fibonacci Extension, if the bulls defend the liquidity range above $2,600.
However, Ether’s price could retrace towards the support level of around $2,537 before rallying towards its all-time high.
According to veteran trader Peter Brandt, Ether price has been forming a head and shoulders (H&S) pattern in the daily time frame, which could lead to a major rebound ahead.
Moreover, the daily Relative Strength Index (RSI) has been forming a bullish divergence, thus signaling the buyers are in control.
Ethereum Whales Gradually Returns
The demand for Ethereum among institutional investors has gradually increased in the recent past, after flip-flopping in September and August. According to the latest market data, the US spot Ether ETFs, led by BlackRock’s IBIT, have registered a net cash inflow of about $79 million since the beginning of this week.
According to market data from CoinGlass, the supply of Ether on centralized exchanges declined by nearly 3 million in the past 24 hours. The largest outflow of Ether was registered on Binance, Kraken, and OKX exchanges.
Nonetheless, on-chain data shows a notable Ether selloff in the past few days, which was deposited by unknown wallets to various exchanges led by Coinbase Global Inc (NASDAQ: COIN).
Key Fundamentals to Consider
The Ethereum network has faced intense competition from emerging layer one (L1) chains led by Solana SOL $133.7 24h volatility: 0.6% Market cap: $75.02 B Vol. 24h: $4.62 B , Avalanche AVAX $13.51 24h volatility: 0.1% Market cap: $5.80 B Vol. 24h: $382.85 M , Binance Smart Chain (BSC), and Tron TRX $0.29 24h volatility: 0.1% Market cap: $27.23 B Vol. 24h: $578.43 M among others.
The Ethereum’s core developers led by Vitalik Buterin have been working on upgrades that will make Ether more user-friendly without compromising security, including lowering transaction fees. The use of layer twos to scale the Ethereum network has been commended but remains highly fragmented for mainstream adoption.
I need to provide an update to this thread from July.
The supply of #ETH had been growing at approximately 60k/mo for 6 months. However, since the 50 bps rate cut a few weeks ago, the inflation as slowed to approximately 30k-40k/mo.
If the new pace continues, it would take 3-4… https://t.co/TvaGZznkSM pic.twitter.com/lMvUlfqmEj
— Benjamin Cowen (@intocryptoverse) October 18, 2024
According to a popular crypto analyst Benjamin Cowen, the supply of Ethereum will likely continue to drop in the coming months following the recent 50 bps Fed rate cut. Cowen noted that Ether’s supply has in the past been growing by 60k per month, but the demand has significantly increased in the last few weeks.
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