Ethereum, the crypto giant holding the second position in the market, is drawing attention as traders and investors gear up for the final quarter of 2024 amid a climate of uncertainty.
Recent scrutiny of the ETH/USDT pair highlighted a divergence in cumulative volume delta (CVD). While ETH prices have been hitting equal highs, the CVD has been forming lower highs, hinting at a possible reversal.
This type of CVD divergence typically signals a weakening in buying pressure, suggesting that Ethereum may undergo significant price adjustments in the near future.
If the depth of the order book remains constant, ETH could form lower highs. In contrast, if the depth increases, prices are expected to rise.
ETH/USDT Finding Support at a Pivotal Level
A detailed analysis of Ethereum’s price movement shows that ETH/USDT is currently at a crucial support level, forming a broadening ascending wedge on longer timeframes.
There is a possibility of a double bottom pattern emerging along the ascending trendline, indicating a potential upward trajectory. However, a breach below this support level could trigger further price drops.
On the daily chart, Ethereum is also shaping a double bottom around the $2,100 mark, which could serve as a critical point for a potential recovery.
A reduction in rates might prompt a rebound for Ethereum in Q4, aligning with the patterns observed in other cryptocurrencies in recent years.
Decline in Mega Whale Addresses
The count of mega whale addresses, denoting holders with over 10K ETH, has been steadily decreasing, suggesting a waning confidence among significant investors.
These whales stopped accumulating Ethereum in early July and have opted to sell or redistribute their holdings instead.
Despite these trends, the CVD divergence hints that the corrective phase could be drawing to a close. Nevertheless, concerns persist due to the persistent decline in mega whale addresses, which could hinder any substantial price reversal.
Observing OI-Weighted Funding Rates
Analysis of Open Interest-Weighted (OI-Weighted) Funding Rates for Ethereum using Coinglass indicates a rise in green figures, a positive signal for ETH.
An escalation in OI-Weighted Funding Rates typically signifies a growing interest from traders in Ethereum, pointing towards a bullish outlook for the long run.
With traders reentering the market, Ethereum could be on the brink of a price recovery, particularly as it nears a critical zone that could determine its next course of action.
Decline in ETH Mainnet Fees
The mainnet fees on Ethereum have seen a significant drop, plummeting over 30 times in the last six months. While this has raised concerns about Ethereum’s sustainability in the long run, these apprehensions are baseless.
ETH receives a share of fees from its Layer 2 solutions, enhancing its overall network activity. Lower mainnet fees benefit traders who previously steered clear of ETH due to high transaction costs.
This shift could attract more activity, particularly in the memecoin sector, a segment that is steadily growing.
The launch of Ethervista, akin to Solana’s Pump.Fun, will also have a significant impact on ETH’s price movements by increasing liquidity for ETH-backed memecoins, positioning Ethereum for potential growth in Q4 2024.