Ethereum Poised for 20% Rise on Buying Pressure from ETF Investors, But Faces Key Trendline Obstacle

• Ethereum ETFs boosted the crypto ETF landscape after posting a net inflow of $155 million last week.
• ICO-era Ethereum wallet transfers an additional 5K ETH to OKX, expanding its potential sale to $154 million.
• Ethereum could be up 20% but faces a key trendline obstacle amid retesting of crucial resistance level.

Ethereum (ETH) is up 1% on Monday and is poised for a 20% gain after buying momentum from traditional investors in ETH ETFs. However, it faces potential downside pressure from a likely loss of an old whale and resistance around a key trend line.

Daily market reasons: Ethereum ETF, whale dump, buy signal in on-chain values

Ethereum ETFs globally saw a net inflow of $155 million last week, the largest of any digital asset, according to CoinShares data. ETH ETF inflows indicate that traditional investors capitalized on the market correction last week to get ETH at lower prices.

Notably, BlackRock’s iShares Ethereum ETF ( ETHA ) is on track to hit $1 billion in cumulative net inflows after surpassing $900 million last week.

With Grayscale’s ETHE exits slowing and the broader market recovering, ETH ETFs could have a positive impact on the ETH price in the coming weeks.

However, a few old whales are still abandoning their holdings and could cause bear pressure in the short term. According to Lookonchain data, an Ethereum whale deposited 5,000 ETH worth $13.2 million on the OKX exchange in the past few hours. The whale has been depositing ETH on OKX since July, potentially selling 48,500 ETH worth $154 million.

Balena received 1 million ETH at $0.31 during Ethereum’s ICO and currently holds 303.5K ETH in two wallets.

Meanwhile, Ethereum’s 30-day Market Value to Realized Value (MVRV) ratio shows that all investors who bought ETH in the last 30 days saw an average loss of 9%. ETH weighted sentiment also fell to -0.2%, indicating slightly negative or bearish sentiment against the top altcoin. These on-chain values ​​show that ETH may still be in the buy zone in the event of a rally.

ETH MVRV and weighted sentiment

ETH Technical Analysis: Ethereum has 20% upside potential, but faces a key trend hurdle

Ethereum is trading around $2,660 on Monday, up more than 1% on the day. Over the past 24 hours, ETH has seen liquidations of $55.71 million, with long and short liquidations accounting for $35.09 million and $20.62 million, respectively.

ETH is trying to break through the $3,723 resistance, a level it has rejected twice in the past week. This resistance level intersects with a trendline suggesting that ETH could drop to a low around the $2,020 price. As the chart below shows, ETH posted similar moves from August 2022 to November 2022 and from July 2023 to October 2023.

ETH/USDT Daily Chart

However, the Relative Strength Index (RSI) at 41 and breaking above its moving averages suggests that ETH is seeing increased bullish momentum. This is also evident in the Stochastic Oscillator (Stoch), where the %K line crossed above the %D line again on Sunday. Such a move in the Stoch indicates that momentum is shifting in favor of buyers.

Potential bullish momentum is bolstered by ETH futures open interest (OI) rising over 4% to nearly $11 billion and the ETH Long/Short ratio rising to 1.01. Rising OI when price is trying to bounce back often indicates the potential for further upside.

As a result, ETH could rise by more than 20% to around $3,368, where it faces key resistance. The 100-day simple moving average (SMA) could also act as resistance after ETH posted a “Death Cross” on Thursday when the 50-day SMA crossed below the 100-day SMA.

The thesis will be invalidated if ETH breaks below the support level around $2,020, which also intersects with a key trendline.