Ethereum price has shown a notable rebound in recent days, driven by market optimism surrounding the recent Fusaka upgrade, which has positively impacted its network statistics. The cryptocurrency reached a high of $3,247, its strongest performance since November 14, and currently stands approximately 20% above its November low. Several key factors suggest that Ethereum may be on the verge of a substantial bullish breakout, potentially reaching $4,900.
Ethereum Price Technicals Suggest a Rebound is Possible
Analysis of the daily timeframe chart reveals highly bullish technical indicators for ETH. The cryptocurrency has formed a falling wedge pattern, a bullish continuation pattern that connects the highest and lowest price swings since September 26. Currently, ETH has moved above the upper boundary of this wedge and is attempting to flip the Supertrend indicator to a green signal, indicating an upward trend.
Furthermore, the Percentage Price Oscillator, represented by two lines, has executed a bullish crossover and is trending upwards. These technical signals collectively point towards a continued upward trajectory for Ethereum. The next significant resistance level to monitor is the year-to-date high of $4,960, which represents a potential surge of approximately 60% from its current trading level.
ETH ETF Inflows and Falling Exchange Reserves Signal Strong Demand
Beyond technical analysis, several other fundamental factors indicate that the Ethereum price rally has considerable room for growth in the upcoming weeks.
Firstly, data from third-party sources indicates that American investors continue to purchase Ethereum Exchange Traded Funds (ETFs), even amidst fluctuating market performance. SoSoValue data reported that these ETFs accumulated over $312 million in assets last week and an additional $9.6 million this week. This sustained inflow is particularly noteworthy as all spot Bitcoin ETFs experienced a net outflow of $142 million during the same period.
Secondly, a consistent decline in Ethereum reserves held on exchanges serves as another indicator of robust investor demand. This reduction in supply is being channeled into ETF staking and ongoing accumulation by significant entities. For instance, BitMine, a company whose chairman is Tom Lee, has reportedly purchased Ethereum tokens valued at over $11 billion in recent months.
Data compiled by CoinGlass corroborates this trend, showing that the percentage of Ethereum supply held on exchanges has decreased to 8.84%, a figure significantly lower than Bitcoin's 14.8%.
Finally, Ethereum's development team has consistently enhanced the network, with the recent Fusaka upgrade being a prime example. These ongoing improvements aim to solidify Ethereum's position as a superior blockchain platform compared to its competitors. This strategic enhancement is expected to drive increased demand from companies developing solutions in critical sectors such as decentralized finance (DeFi) and real-world asset tokenization, industries where Ethereum currently holds a dominant market share.