Ethereum, like many other altcoins, is currently facing significant selling pressure, making it challenging to overcome the weakness experienced in early August. Despite showing some moments of strength following a sell-off on August 5, the prices of Ethereum are still lingering below the $2,800 mark. One positive aspect that can be observed, particularly from the daily chart, is the impressive resilience displayed by the bulls. Despite the continuous wave of lower lows, buyers have managed to absorb the selling pressure, maintaining prices above the crucial $2,500 level.
According to one analyst, the ability of bulls to keep Ethereum above the $2,500 mark is crucial for the continuation of the uptrend. This price level, considered a round number, serves as the base of the bull flag formation seen in the daily chart. While Ethereum has been consolidating below the resistance zones of $2,700 and $2,800 post the spike on August 8, the support at $2,500 has remained evident. The formation of a bull flag amidst this consolidation indicates underlying strength in the market.
The analyst further suggests that if buyers maintain $2,500 as a support level, Ethereum could potentially surge to $3,150 in the upcoming sessions. This recovery comes as a relief, especially after the bearish breakout formation observed during the sell-off from August 1 to 5, which breached critical support zones from April to July 2024. Additionally, the anticipated uptrend could also be supported by the inflow of capital into spot Ethereum ETFs.
Institutions have shown a keen interest in gaining exposure to Ethereum through spot ETFs, with the total inflows exceeding $2 billion as reported by one ETF analyst. This figure excludes outflows from Grayscale’s ETHE, as BlackRock’s iShares Ethereum ETF continues to attract demand. The approval of spot ETFs in July has paved the way for increased institutional involvement in the Ethereum market.
Apart from the institutional interest, Ethereum has also seen positive advancements within its ecosystem that could support price appreciation. Vitalik Buterin, the co-founder of Ethereum, highlighted the reduction in gas fees on the mainnet and through Layer-2 solutions like Base. Furthermore, efforts towards decentralization by projects like Arbitrum and Optimism have been noted as significant developments. The recent announcements from Arbitrum and Optimism regarding their fault-proof solutions have been received with optimism within the Ethereum community.
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