Ethereum’s performance this year has been lackluster compared to other major cryptocurrencies. Traders are unsure if it’s about to surge or continue its downward trend. However, recent price action suggests a potential short-term rebound.
A Chart Pattern Suggests a Recovery
Technical analyst Ali Martinez spotted a bullish pattern on Ethereum’s chart. This pattern could signal a price increase, pushing ETH towards key resistance levels.
Specifically, a “parallel channel” pattern has formed on the daily chart. This pattern, created by connecting price highs and lows with parallel lines, helps predict potential entry and exit points. Currently, ETH is testing the lower boundary of this channel, a crucial point that could trigger a price bounce.
A successful bounce could send ETH back towards $2,350, potentially leading to a larger recovery towards $3,000 and even $4,000. The current situation puts ETH at a critical juncture, poised for its next major move. Bullish momentum is building, increasing the chances of a breakout.
Investors Are Reducing Their ETH Holdings
On-chain data reveals that investors are decreasing their Ethereum holdings. Glassnode, a blockchain analytics firm, shows that investors actively adjusted their positions during recent price volatility.
After a price surge to around $2,500 (levels last seen in November 2023), followed by a retracement to $2,050, investors reacted. Those who bought ETH around $3,500 significantly reduced their holdings throughout February, selling at both the peak ($2,500) and the bottom ($2,050). They’ve lowered their average cost basis by about 10% and still hold over 1.75 million ETH at an average price of $3,200. This trend continued even as the price fell.
A notable example: 500,000 ETH were bought at $2,200 on March 1st, only to be quickly sold around the $2,500 high. The $2,800 level is another key resistance area, with 800,000 ETH accumulated there. Glassnode highlights this level as a potential catalyst for a price recovery.
