Ethereum Price Reaches $2900 as Bulls Take Advantage of Decreasing Bitcoin Dominance
After struggling to establish a bullish position, Ethereum (ETH) has finally begun to show signs of recovery amidst an overall improvement in market sentiment. One key factor driving the recent surge in ETH price is the decreasing dominance of Bitcoin.
For several months, there has been a noticeable correlation between Bitcoin dominance and downward pressure on ETH price. This trend has been particularly evident this year, with Bitcoin dominance reaching a year-to-date high of 58.59%.
As Bitcoin dominance has started to decline, Ethereum has once again started to gain positive momentum. This shift suggests that capital flows are moving towards alternative cryptocurrencies, with Ethereum being a prime beneficiary of this trend.
The recent rally has seen bulls taking control, with a 16% price increase over the past week. This surge comes after a period of consolidation near its recent lows.
Analysis of market metrics indicates that large holders, known as whales, have been actively accumulating ETH ahead of the recent rally. Their holdings have seen a notable increase since the beginning of September.
Data on whale addresses shows that these large holders had amassed 58.12 million ETH by September 1st, which had grown to 58.48 million ETH by September 23rd – an increase of around 360,000 coins. In monetary terms, this corresponds to approximately $949.68 million at current market prices.
Furthermore, inflows from large holders have also surged in recent days, with an increase from 101,740 coins on September 14th to 675,000 coins on September 19th. Similarly, outflows from large holders peaked between September 18th and 19th, indicating a temporary uptick in selling pressure.
Address inflows surpassed outflows on September 23rd, suggesting an increase in demand for ETH compared to supply.
Will Ethereum Sustain its Bullish Momentum?
The recent rapid uptrend in Ethereum’s price could signal a broader recovery phase for the digital asset. While many traders might anticipate a continued rally, sustaining such momentum may prove challenging in the short term.
If Ethereum pushes towards the $2,800 to $2,900 price range, historical data suggests that this zone has acted as both support and resistance levels. Therefore, price movements within this range may encounter some resistance.
At the time of writing, ETH’s Relative Strength Index (RSI) was at 60.03, indicating that it had not yet reached overbought levels.
Entering the aforementioned price range could trigger profit-taking activities, potentially leading to increased selling pressure in the market.