Technical Analysis Points to Bullish Reversal
Ethereum's native token, Ether (ETH), is showing signs of a textbook bearish reversal setup, despite a recent 6.50% drop in October. Technical indicators suggest a potential rebound in the coming weeks.
As of Thursday, Ethereum's 4-hour chart displays a "triple bottom" pattern. This formation occurs when an asset's price repeatedly fails to break below a specific support level, indicating weakening selling pressure and building buyer momentum.
For ETH, this crucial support level is situated between $3,750 and $3,800. Buyers have consistently stepped in to defend this price range on three separate occasions, preventing further declines.
The next significant hurdle for Ethereum lies at its neckline resistance, which is approximately between $3,950 and $4,000. This price zone also coincides with the 50-period exponential moving average (50-EMA), represented by the red wave on trading charts.
A decisive break above this neckline resistance would confirm the triple bottom pattern. Such a breakout could potentially propel ETH towards a price target of around $4,280, representing a 10% increase from current levels, potentially by early November.
Trading volumes have shown a gradual decline during the formation of this pattern, a common precursor to a significant price movement. A noticeable surge in buying volume accompanying a breakout would further validate the bullish triple bottom setup.
This bullish reversal outlook aligns with analyses from traders like Kamran Asghar, who has identified the $4,800-$5,000 area as a key resistance zone, suggesting potential for further upside beyond the immediate $4,000 target.
"Mega Whales" Accumulating ETH During Price Dip
On-chain data from Glassnode reveals a significant shift in Ethereum's ownership structure amidst the recent price decline. Wallets holding between 10,000 and 100,000 ETH, often referred to as "mega whales," have been actively accumulating Ether at an accelerated pace.
These large holders are now collectively controlling nearly 28 million ETH. This accumulation trend has been the fastest observed in years.
Conversely, smaller whale cohorts, specifically those holding between 1,000 and 10,000 ETH, have experienced a notable decrease in their balances. This trend has been particularly pronounced over the past month, coinciding with Ethereum's price correction.
This dynamic suggests that as the price of ETH decreased, some mid-sized holders may have sold their positions, allowing larger investors to absorb the supply. Alternatively, these mid-sized holders might have increased their own holdings, thereby moving into the larger "mega whale" category.