Recent weeks have been tough for Ethereum [ETH], with the digital asset continuing to struggle in terms of both price action and overall market sentiment. After experiencing a price decline last month, ETH has remained on a downward trend.
Within the last 24 hours, Ethereum has recorded a further decrease of 4.5%, with its current trading price standing at $2,399, marking a 2.3% dip in the broader market context.
Despite the prevailing bearish mood, some market analysts remain hopeful about Ethereum’s future prospects. One such analyst, Mags, shared an optimistic view of Ethereum’s potential for a reversal in its downtrend.
Potential Reversal in Ethereum’s Future?
Mags recently shared insights on Ethereum’s market movement on X (formerly known as Twitter) stating, “Ethereum is currently within a large triangle pattern, and we might witness a double bottom formation near the upward trendline support before it embarks on an upward trajectory.”
This analysis implies that Ethereum might be approaching a critical juncture, signaling the possibility of a bullish reversal in the near future.
From a technical perspective, a double bottom formation is considered a bullish reversal pattern, indicating that the asset’s price could be nearing a bottom and could soon start to ascend again.
This pattern typically emerges when the price touches a support level twice, with a slight upward movement between the two low points.
If Ethereum indeed follows this pattern as suggested by Mags, there could be a notable upward momentum following the current bearish phase.
Technical indicators for Ethereum also support the notion of a potential rebound, with the asset hovering near crucial support levels at present.
If the double bottom pattern materializes, Ethereum might break out of its prolonged downtrend and initiate a new bullish phase.
While this scenario is speculative, it is advisable to remain cautious as Ethereum nears these significant price levels.
Positive Indicators Despite Price Decline
Interestingly, despite the decline in Ethereum’s price, certain fundamental metrics of the asset have started showing positive signs.
For example, data from IntoTheBlock suggests that whale transactions on Ethereum—transactions exceeding $100,000—have begun to recover after a notable decline earlier in August.
On August 5th, these transactions peaked at over 16,000 before dropping to around 2,210 on August 10th. Recent data now indicates a rebound, with whale transactions currently standing at 4,530.
This resurgence in whale activity indicates that major institutional investors might be positioning themselves for a potential price recovery in Ethereum.
An uptick in whale transactions is generally viewed as a positive sign, indicating increased interest from deep-pocketed investors that could drive a broader market rally.
Additionally, data from Glassnode reveals an uptick in Ethereum’s active addresses. While active addresses reached a peak of 589,000 on August 14th, it declined to below 400,000 last week.
At present, this metric has rebounded to 420,000. An increase in active addresses typically signifies rising user engagement within the network, which could also contribute to pushing prices upwards.