Ethereum bulls defend key support level as technical indicators point to bullish reversal

• Ethereum ETFs posted net outflows of $23.7 million as grayscale ETHE flows continued to trend down.
• Ethereum buyers are absorbing the selling pressure of capitulating whales and Jump Crypto.
• Ethereum bulls have returned to defend the key support level as technical indicators signal that ETH is performing a bullish reversal.

Ethereum (ETH) surged nearly 10% on Thursday as buyers piled on selling pressure from capitulating whales and Jump Crypto. Meanwhile, ETH technical indicators suggest that ETH has made a low and is seeing a bullish reversal.

Daily Market Reasons: ETH ETF Circulates, Buyers Absorb Selling Pressure

Net flows of Ethereum ETFs turned negative on Wednesday after seeing outflows of $23.7 million. BlackRock’s ETHA, which led flows for the past two days, saw zero flows, while Grayscale’s ETHE outflows fell further to $31.9 million. The total net asset value of the nine Ethereum ETFs fell to $6.6 billion.

The net exit follows the New York Stock Exchange (NYSE) filing for listing and options trading for Ethereum ETFs Bitwise and Grayscale. This comes days after Nasdaq filed a similar options trading request for BlackRock’s ETHA.

Meanwhile, some whales capitulated as the market fell. Lookonchain reports that a whale that amassed 14,384 ETH at an average price of $3,291 between June 22 and August 4 sold all of its shares on Binance at $2,417 after the market crash. The move made the whale realize a loss of $12.57 million.

In addition, Jump Trading, which has been on an ETH selling spree for the past four days, withdrew USDC 32.6 million from Binance after transferring ETH to the exchange. This suggests that the firm may have already sold ETH as it looks to divest its remaining holdings in Lido.

However, buyers appear to be absorbing the selling pressure as exchanges have continued to experience net outflows of ETH over the past four days, according to CryptoQuant data.

ETH Exchange Netflow

The Coinbase Premium ETH Index, which measures the difference between the price of ETH in Coinbase Pro and Binance, was also above the 0 line. It reached 0.04 on August 6 before falling slightly to 0.03. The index above the 0 line indicates strong ETH buying pressure from US investors as the leading altcoin continues to rally.

ETH Technical Analysis: Ethereum Bulls Could Help Initiate Bullish Reversal

Ethereum is trading around $2,580, up nearly 10% on the day. Over the past 24 hours, ETH has seen liquidations of $55.77 million, with long and short liquidations accounting for $34.65 million and $21.12 million, respectively.

Bulls returned to defend the $2,300 price level after ETH posted a 6% drop on Wednesday. The $2,300 price is a crucial support level for ETH, as 2.12 million addresses have accumulated 50.08 million ETH around this price, according to IntoTheBlock data.

ETH/USDT Daily Chart

ETH’s Relative Strength Index (RSI) has moved out of the oversold region and is indicating an upside reversal as it appears to be breaking above its moving average. Crossing the RSI above the yellow line of the moving average often indicates bullish momentum.

The Stochastic Oscillator is also moving in a direction suggesting that ETH may recover. After indicating a bullish divergence on August 7, when it made a higher low while ETH price dipped lower, it moved away from the oversold region.

The ETH Long/Short ratio also suggests a similar move as it rose to 1.02, indicating that futures traders are becoming bullish.

As a result, ETH could rise to reverse the resistance around $2,723. A successful move above this level could see ETH approach resistance around $3,368 – around which the 50, 100 and 200 day simple moving averages (SMA) are looking to converge.

The psychological level of $2,000 could serve as key support to the downside in case of dominant bearish sentiment. A daily close of the candlestick below the $2,000 level will invalidate the bullish thesis.