Ether could be nearing a price breakout based on its current valuation combined with improving macroeconomic conditions following the summer slump in crypto markets.
Ether (ETH) could be near its local price bottom, following an over five-month downtrend that started at the end of March.
Based on a key technical chart pattern, Ether could be set to break this downtrend, according to crypto analyst and entrepreneur Michaël van de Poppe, who wrote in a Sept. 9 X post:
“The bullish divergence is still valid and a higher low has been made. The downtrend of the past months is likely going to be broken upwards. That could be a significant push for the entire market.”
ETH/BTC, 12-hour chart, bullish divergence. Source: Michaël van de Poppe
A bullish divergence is a technical formation used by traders to identify a strengthening in market momentum following lower lows. The indicator is associated with price reversals from downtrends and suggests that Ether’s price could break out against Bitcoin (BTC).
Related: Arthur Hayes predicts Bitcoin rally after closing short position
Ether whales are re-emerging after the summer crypto market slump
Following the summer illiquidity in crypto markets, whales (large Ether holding entities) are reemerging.
A savvy whale bought 5,000 ETH worth over $11.4 million in the past two days, according to a Sept. 9 X post by onchain intelligence firm Lookonchain:
“The whale bought 5,200 $ETH at an average price of $1,322 in November 2022. Then sold it at an average price of $2,093 in January, December 2023, and January 2024, making more than $4M!”
Savvy Ether whale purchases. Source: Lookonchain
Whales can significantly impact a cryptocurrency’s price action due to the high amount of market-moving capital. Traders often follow whale selling patterns for cues on a cryptocurrency’s short-term price trajectory.
Related: El Salvador marks 3 years of Bitcoin adoption with $31M profit
Ether price remains in an over five-month downtrend despite ETH ETFs
Ether price has continuously declined since the end of March despite the historical debut of the first US Ether-based exchange-traded funds (ETFs).
Ether price fell over 32% since the US Ether ETFs debuted for trading on July 23, when ETH was trading above $3,400.
ETH/USD, 1-year chart. Source: Cointelegraph
This is partly because of the continuous negative outflows since the ETH ETFs recorded over $568 million in cumulative net outflows since launch, according to Farside Investors data.
Ethereum ETF Flow (USD, million). Source: Farside Investors
Investors anticipated a significant price increase from the launch of the Ether ETFs. For Bitcoin, ETFs accounted for about 75% of new investment in the cryptocurrency by Feb. 15 as it surpassed the $50,000 mark.