Ethereum, like many other altcoins, is currently facing a significant amount of selling pressure in the market. Despite some brief moments of strength following a sell-off in early August, the price of Ethereum still struggles to rise above $2,800. However, one positive aspect to note from the daily chart is the resilience of the bulls. Despite a continuous wave of lower lows, buyers have managed to hold the price above the $2,500 mark.
According to an analyst, it is crucial for bulls to maintain Ethereum above the $2,500 mark in order for the uptrend to continue. This level is seen as the base of a potential bull flag formation in the daily chart. In recent trading sessions, Ethereum has been consolidating below resistance levels at $2,700 and $2,800 while finding solid support at $2,500. If buyers can anchor at $2,500, it could signal a potential move towards $3,150 in the near future.
Factors Driving Potential Recovery
The recent sell-off from August 1 to 5 led to a breach of critical support zones from April to July 2024. However, one analyst believes that the upcoming potential leg up in Ethereum’s price could be driven by inflows into spot Ethereum ETFs. Since the approval of spot ETFs in July, institutions have shown interest in gaining exposure to Ethereum, with over $2 billion in inflows recorded. BlackRock’s iShares Ethereum ETF has been particularly influential during this period.
Aside from the inflows from spot Ethereum ETFs, Ethereum co-founder Vitalik Buterin has highlighted several positive developments that could support price growth. This includes the reduction in gas fees on the mainnet and the introduction of layer-2 solutions like Base. Furthermore, Buterin mentioned the significant decentralization efforts by projects like Arbitrum and Optimism, both of which recently announced their fault-proof systems.
While Ethereum is currently facing some challenges due to selling pressure in the market, there are several factors indicating a potential upside in the near future. By holding above the $2,500 mark and benefiting from inflows into spot ETFs, as well as positive developments in the network’s infrastructure, Ethereum could see a significant price increase in the coming sessions.
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