Ethereum (ETH) has recently encountered a 13% price correction, pulling the altcoin down from its local highs. However, signs of recovery are emerging as the cryptocurrency has secured a crucial bear market support level. With market sentiment gradually improving, ETH appears poised for a potential rebound, although challenges remain.
Ethereum has experienced an increase in realized losses, typically a sign of untimely selling by investors who exited their positions during the downturn. However, this also indicates a shift in investor behavior, with many choosing to HODL rather than risk further losses. By retaining their assets, investors are waiting for Ethereum’s price to increase, providing an opportunity to sell for profit in the future.
This strategic shift may stabilize Ethereum’s price, as reduced selling pressure can prevent additional declines. Long-term holders are likely anticipating a better market environment, contributing to Ethereum’s gradual recovery.
The overall macro momentum for Ethereum is looking more favorable, especially when assessing the exchanges’ net position change. This indicator monitors the flow of ETH into and out of exchanges, and the recent decline indicates that inflows into exchanges have dropped. Lower inflows typically suggest a decrease in selling pressure, as fewer investors are moving their assets onto exchanges to sell.
This shift in momentum reflects a positive change in market sentiment. As selling activity diminishes, Ethereum could gain the necessary room to recover from its recent decline. Investors are demonstrating increased confidence in the asset, potentially leading to upward price movement in the coming days.
Currently, Ethereum’s price is trading at $2,428, recovering from the recent 13% decline. The cryptocurrency has successfully maintained the 23.6% Fibonacci Retracement line at $2,401 as a support level, signaling a potential continuation of the uptrend.
With these market factors in play, Ethereum could possibly breach the $2,591 barrier, coinciding with the 38.2% Fibonacci line. A successful breakout would elevate ETH above $2,600, allowing it to regain some of the losses incurred during the correction.
However, if Ethereum fails to surpass $2,591, the altcoin may enter a phase of consolidation, fluctuating between $2,401 and $2,591. This scenario would keep Ethereum subdued and invalidate the current bullish outlook, delaying any further price rallies in the near term.
Keywords: altcoin analysis, ethereum (eth) analysis
