- Ethereum trades just below EMA50 at $2,573, and a breakout could spark a 38% rally toward the $3,500 resistance zone.
- ETH exchange reserves have dropped 37% since 2022, showing consistent outflows and signaling rising long-term holder conviction.
- Consolidation under key resistance with growing stablecoin activity suggests bullish potential despite current market indecision.
Ethereum (ETH) currently trades around $2,539, struggling just below its key 50-week EMA resistance at $2,573. This technical level remains a major hurdle. CryptoBullet notes that historically, breaking above this line often triggers a 38% rally. A similar move would place ETH near $3,500. Market data reveals a tug-of-war at this zone, marked by smaller candlesticks and mixed momentum. Traders remain cautious as ETH consolidates under major resistance, showing signs of indecision across weekly candles.
Source: CryptoBullet
Technical Indicators Signal Possible Breakout
The ETH/USDT pair on Binance shows growing bullish structure. Higher lows from recent bottoms reflect improving sentiment. However, the weekly trend still leans bearish as price remains below the EMA50. The overall pattern suggests an ongoing consolidation phase. Historically, such setups often precede explosive price movements. Moreover, price action confirms clear support around $1,500 and resistance near $4,000. Ethereum’s interaction with the moving average continues to dictate short-term direction.
Additionally, long-term market structure shows a series of swing highs and lows, forming a wave-like rhythm. Volume data reflects increased interest during major price spikes and dips. Despite recent declines, the trend of higher lows supports a potential breakout scenario. Hence, technical traders closely monitor the $2,570 region. A decisive breakout may shift sentiment dramatically.
Shrinking Exchange Reserves Fuel Bullish Outlook
Meanwhile, on-chain data adds further optimism. ETH reserves on centralized exchanges have fallen consistently since July 2022. DegenWolf highlights that current exchange balances sit at just 18.7 million ETH. This marks a 37% drop from peak levels near 30 million ETH. Notably, these outflows have continued during both bull and bear phases.
Source: MrDegenWolf
Consequently, this persistent decline signals increasing investor preference for long-term holding or staking. The largest outflows occurred during 2022-2023, with 6 million ETH withdrawn over six months. Moreover, stablecoin activity on Ethereum has hit all-time highs. This suggests increasing ecosystem demand, despite muted price action.
Besides, reduced supply on exchanges historically precedes price surges. With ETH liquidity drying up, supply-demand dynamics could favor bulls. However, market disbelief remains high. Sentiment stays mixed as crypto influencers focus elsewhere.
