During the previous week, Ethereum [ETH] surged by 22.5%, reaching $3,444.25, a level not witnessed since July 24 this year. However, it has retraced by 6.37% in recent days.
Based on analysis by CryptoCrypto, the current decline appears to be temporary and is unlikely to greatly impact Ethereum’s long-term prospects.
A Positive Five-Day Buying Streak Bolsters ETH’s Bullish Outlook
The bullish sentiment surrounding Ethereum has been reinforced by a string of five consecutive days of buying activity from traditional investors, who are increasingly showing interest in ETH.
These investors have consistently been acquiring spot ETH ETFs from various prominent platforms.
As per Coinglass’s latest data, there has been a positive Netflow in spot ETH ETFs, with a total accumulation of 213,570 ETH in this recent period.
This continuous accumulation, despite fluctuations in prices, indicates that traditional investors continue to hold firm confidence in Ethereum’s long-term potential, gearing up for the next leg of upward movement.
In addition to institutional investors’ actions, CryptoCrypto has identified a similar trend among certain spot traders.
Although traditional investors remain active, there has been a shift in sentiment among certain traders, with Exchange Netflow data indicating a negative turn – an outflow of 9,957.59 ETH in the last 24 hours, according to Cryptoquant.
Derivative Traders Shift to Bearish Outlook on ETH
Derivative traders have switched to a bearish stance on ETH, evidenced by significant long liquidations recorded over the past 24 hours.
Long liquidations occur when the price moves against long traders’ positions, forcing them to close their positions. Coinglass data shows that approximately $98.73 million worth of long trades have been liquidated due to the downtrend.
Simultaneously, the increasing Exchange Reserve of Ethereum suggests an influx of ETH into exchange wallets, suggesting that some traders are gearing up to sell.
Considering these developments, it is likely that ETH’s price may witness further declines. However, the pivotal question remains: how deep will the retracement go?
CryptoCrypto has conducted an in-depth analysis to forecast potential support levels during ETH’s downturn.
A Temporary Pullback Preceding a Renewed Bullish Momentum
Despite a slight anticipated decline, Ethereum continues to maintain a strong overall bullish structure, poised to resume its rally.
According to the daily ETH chart, the key demand area for potential retracement lies between $3,079.89 and $3,015.91.
This zone is likely to generate buying pressure to propel ETH towards its next bullish trajectory.
Once ETH reaches this level, a significant upward move towards $3,972.01 is expected.
However, if bearish sentiment persists, there is a possibility of ETH descending further, potentially dropping to $2,725.04 – a level that could trigger a renewed bullish upsurge.