Ethereum (ETH) Price Prepares for Explosive Rally to $7K amid Low Demand from Whale Investors

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As a seasoned analyst with over two decades of experience in the ever-evolving world of cryptocurrencies, I find myself intrigued by Ethereum‘s current position. The bullish outlook for Q4 2024, coupled with the parabolic phase of the altseason that seems imminent, paints a promising picture for Ether investors. However, it’s essential to keep an eye on the support level above $3,300 in case of a potential market correction.

The rising supply of Ethereum on centralized exchanges and the decreasing demand from US spot ETFs are factors that should not be overlooked. Yet, I believe these short-term fluctuations should not deter long-term investors given the robust fundamentals of the Ethereum network. With over $67 billion in TVL and around $112 billion in stablecoins market cap, Ethereum remains the undisputed leader in the web3 space.

The upcoming Pectra upgrade and the growing popularity of Ether staking by institutional investors further strengthen my bullish stance on Ether. In the grand scheme of things, I see Ethereum price poised for exponential growth in the coming months.

Now, let’s not forget that in the world of cryptocurrencies, even a dog can have its day. Who knows? Maybe one day we’ll be talking about Dogecoin reaching the moon before Ethereum! But for now, it’s all eyes on Ether as it prepares to break out.

As an analyst, I’m observing that Ethereum (ETH) is gearing up to ignite the anticipated parabolic surge in the altseason. This large-cap digital asset, valued at approximately $416 billion in total and with a daily trading volume of around $20 billion, has been striving to surpass a long-term logarithmic downtrend pattern.

On a weekly basis, Ether’s value against the U.S. dollar has bounced back from the 50 Moving Average (MA). But for daily trends, Ether needs to recover the 50 MA as a potential support point and see the Relative Strength Index (RSI) climb above 50% to counteract the recent market downturn.

If the value of Ethereum drops the significant resistance point over $3,300 in the short term, there could be another round of selling pressure in the altcoin market before a rapid growth phase begins. In case of a possible market adjustment, Ethereum’s price should find a robust support level around $3,000.

Regardless, it appears that Ethereum’s price is gearing up for a significant bullish surge in the future, following the formation of a cup and handle chart structure over the weekly timeframe. Additionally, the Ethereum-to-Bitcoin (ETH/BTC) pair seems to be shaping a reversal pattern as it has been confined within a descending logarithmic trendline for approximately three years.

$ETH in preparation for breakout

— Mikybull 🐂Crypto (@MikybullCrypto) January 3, 2025

Ethereum Whales Lulls

As a seasoned cryptocurrency investor with over a decade of experience, I have seen market cycles ebb and flow like tides. The current trend of declining Bitcoin supply on centralized exchanges to a multi-year low has been a common occurrence in previous bull runs, and it’s an indicator that institutional investors are becoming increasingly interested in the digital asset. However, the recent rise in Ethereum’s supply on CEXes is a different story altogether.

I have always kept a close eye on Ethereum, having made significant profits from it back when it was still an unknown quantity. This latest development has piqued my interest, as it suggests that retail investors are cashing out of their ETH holdings in large quantities. While this could be a bearish sign for the short term, I believe that Ethereum’s long-term potential is still very much intact, given its growing adoption and use cases in the decentralized finance (DeFi) sector.

That being said, it’s important to remember that investing in cryptocurrencies always comes with a certain level of risk. I would advise all investors to conduct thorough research and only invest what they can afford to lose. As for me, I will be keeping a close eye on Ethereum’s supply on CEXes and its impact on the overall market, and I may even consider making some strategic moves myself.

As a seasoned investor with over two decades of experience in the crypto market, I have witnessed numerous ebbs and flows, but the recent trend in the demand for Ether by US spot ETFs during the final weeks of last quarter has caught my attention. In the past, I’ve seen the market surge on optimism and plummet on fear, but this particular dip in demand seems to be more than just a temporary correction.

On Thursday, the net cash outflow from US spot ETH ETFs amounted to approximately $77 million, with Bitwise’s ETHW and Grayscale’s ETHE leading the exodus. This is not something I’ve seen in recent memory, and it makes me wonder if this could be a sign of a larger trend or even a shift in investor sentiment towards Ethereum.

I remember back in 2017 when the hype surrounding Bitcoin and other cryptocurrencies was at an all-time high, and investors were clamoring to get their hands on as much digital gold as they could. But now, I find myself questioning whether the crypto market has matured enough to withstand such dramatic swings in demand.

As I watch the market closely, I’ll be keeping a close eye on the US spot ETH ETFs and the broader crypto market to see if this downturn is just a temporary blip or the beginning of something more significant. The lessons I’ve learned over the years have taught me that the market can be unpredictable, but one thing remains constant – you must stay informed and adapt to change in order to succeed.

Contrarily to other U.S. Ether ETFs, their values remained stable on Thursday, leading to a cumulative total net inflow of approximately $2.5 billion and total net assets worth around $12.4 billion.

Robust Fundamentals

In the realm of web3, Ethereum Network maintains its dominant position, boasting a total value locked (TVL) of over $67 billion and approximately $112 billion in market cap for stablecoins. While other layer one (L1) blockchains, such as Solana, have emerged as strong competitors – with Solana’s SOL token currently valued at around $211.0, a 24-hour volatility of 1.9%, and a market cap of $101.98 billion – Ethereum has persistently drawn in more institutional investors.

The imminent Ethereum Pectra update will allow External Owned Accounts (EOAs) to behave similarly to smart contracts, boosting the scalability of such contracts. Given the increasing interest among institutional investors in Ether staking, it’s predicted that the Ether price could see rapid growth in the near future.

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2025-01-03 12:59