Key Market Indicators
Ethereum is showing renewed structural activity as liquidity cycles, exchange reserves, and chart patterns suggest transitional phases in price behavior. Traders are monitoring liquidity, accumulation, and technical formations for potential directional cues.
- •Ethereum’s Liquidity Index nears a reset, historically aligning with price bottoms and signaling potential stabilization before market transitions occur.
- •ETH forms an ascending inverse Head and Shoulders on the 3-day chart, projecting a possible breakout toward a technical target of $17,000.
- •Exchange outflows reduced ETH supply on markets, indicating strong accumulation and tightening liquidity, which may support future upward momentum.
Liquidity Resets Signal Transitional Phases
Ethereum’s Liquidity Index has repeatedly signaled market resets, marking critical correction phases from early 2024 through 2025. Each surge toward the 1.0 zone is followed by a sharp collapse. These resets remove buy-side support and increase market volatility.
According to Cryptorand, ETH is nearing another liquidity reset, which historically has coincided with macro price bottoms. Past cycles show price drifting sideways or downward after liquidity collapses.
The recurring pattern suggests cyclical rhythm, with expansion fueling rallies and abrupt resets preceding corrections. ETH currently exhibits a sharp liquidity drop toward the $2,000 region, indicating a pronounced liquidity vacuum. Traders track these zones closely for market transitions.
Inverse Head and Shoulders Pattern Forms
Ethereum’s 3-day chart shows a potential ascending inverse Head and Shoulders (iH&S) pattern, signaling a possible long-term bullish reversal. The Head formed in mid-2025, flanked by higher Left and Right Shoulders.
Trader Tardigrade observed that ETH is nearing the right shoulder and approaching the $4,800–$5,000 neckline. A successful breakout above this level could push the price toward $17,000.
The right shoulder’s tighter V-shape indicates buyers gaining strength, potentially shifting market sentiment. Increasing momentum at the neckline, if supported by volume, could confirm trend continuation.
Exchange Outflows Suggest Supply Squeeze
Ethereum exchange balances have declined sharply from 17 million ETH to near 11.7–12 million ETH over the past year. This indicates persistent accumulation and reduced sell-side pressure.
Merlijn The Trader observed aggressive outflows despite price retracements toward $1,500–$2,000. The divergence between exchange balances and market price reflects long-term confidence by holders.
Shrinking liquid supply can intensify future rallies when demand returns. Reduced exchange float combined with price consolidation suggests ETH is moving through a macro accumulation phase. Traders consider these outflows alongside technical patterns and liquidity resets for potential setups.