Following a recent period of intense selling pressure, Ethereum (ETH) has shown a slight recovery in the past week.
Although there has been a modest rebound over the weekend, indications point towards potential obstacles to a smooth upward trajectory in the near future.
Following a bearish trend in September, the selling pressure on ETH eased after a 15% retracement last Thursday.
This was accompanied by a period of bullish momentum during the weekend, resulting in a 7% rise from the previous week’s lows.
As of now, ETH is trading at $2477, and its price movement has shown respect for an upward short-term trend line identified by its yellow highlight. The current slight uptrend suggests some level of accumulation.
Could Lackluster Enthusiasm Impede ETH’s Growth?
Despite the weekend rally appearing to be a positive development initially, recent data indicates a reversal in ETH’s money flow indicator over the past 24 hours, indicating a potential outflow of liquidity from ETH.
The Money Flow Index (MFI) implies that the ongoing rally might be driven by weak demand, possibly capping ETH’s growth potential.
However, this scenario remains contingent upon the evolving supply-demand dynamics throughout the week.
The above observations coincide with a waning interest in Ethereum within the cryptocurrency community, potentially suggesting limited short-term profit prospects for ETH investors.
Additionally, on-chain metrics have indicated a significant increase in ETH exchange reserves in the upcoming days, pointing towards a probable surge in selling pressure.
An analysis of exchange flows reveals a notable shift in dynamics. CryptoQuant data shows that ETH’s exchange flows changed direction at the beginning of the month, leading to diminished trading volumes.
At the onset of October, exchange inflows reached 621,000 ETH, slightly surpassing exchange outflows at 599,778 ETH.
As of the present, exchange inflows have decreased to 86,173 ETH, while outflows have risen to just over 120,000 ETH.
Consequently, there is a net demand of 33,827 ETH, equivalent to approximately $83.5 million in demand.
From the insights gathered, it can be inferred that while there is some demand for ETH, it remains relatively muted.
In essence, the lack of fervor surrounding the cryptocurrency may lead to a subdued outcome in the near future.