For the past three months, Ethereum [ETH] has been experiencing a period of consolidation. The question on everyone’s minds is whether this phase will lead to a breakout in November. Let’s delve into how ETH has been performing during this period.
Contrary to bullish expectations, Ethereum has been struggling to recover substantially since its crash in May. The pattern of lower highs observed since August indicates that there has been significant accumulation occurring over the last three months.
Despite the formation of higher lows, ETH has been unable to surpass the $2,800 mark during this timeframe. This resistance level reflects the current state of demand in the market, particularly among large holders.
The flow of Ethereum among large holders has been on the decline since late October. However, the outflows have consistently been lower than the inflows, hinting that the selling pressure might be on the verge of a reversal.
The recent sell-off that triggered a retest of ETH’s ascending support contributed to the diminishing outflows from large holders.
The decrease in outflows from large holders signifies a reduction in the selling pressure exerted by whales. This reduction could potentially signal a shift in market sentiment. Nevertheless, the dwindling inflows from large holders also indicate a waning interest among this category of investors.
Revival of Ethereum Demand
While the movement of large holder flows does not necessarily indicate a resurgence of enthusiasm, analyzing the buy and sell volume paints a more intriguing picture. On 1 November, there was a considerable surge in buy and sell volume, with buying activity dominating the market.
This spike in buy volume may suggest a renewed interest in ETH for the month, although the full extent of this trend remains to be seen. A possible reason for this behavior could be that investors were cautious due to uncertainties surrounding the recent elections.
Exchange flows reacted to this uncertainty by experiencing the lowest levels witnessed in 2024.
During the same period, exchange inflows outweighed outflows, with the former reaching 67,737 ETH compared to 49,890 ETH of the latter within the last 24 hours at the time of this analysis.
Summing up all these insights, it becomes evident that Ethereum’s price movement is closely linked to the subdued sentiment among investors. However, the ongoing consolidation phase hints at the potential for renewed interest post the U.S elections.
It is crucial to note that the outcome of the elections could sway investor sentiment either positively or negatively, depending on the winning candidate.