- The ETH/USD pair posted higher lows after a dip.
- Technical analysis shows that Ethereum’s native cryptocurrency can top $5,000 in the near term.
- Rising Ethereum address activity and ETH exchange outflows support the bullish bias.
JAIPUR(CoinChapter.com) – Ethereum’s underlying current Ether underwent a selloff, a 6.2% dip from the $4,818 to $4,512 during the day trading session on Friday. But technicals support the second-largest cryptocurrency’s growth outlook and a rally to $5,000 in the near term. In addition, fundamental factors also support ETH’s bullish bias.
Ether has been on an uptrend since the beginning of October. In the process, the ETH/USD pair printed higher lows persistently after registering a new price high. As a result, ETH broke out of the Ascending Triangle setup and has managed to flip its May 2021 high into support.
Related: 3 reasons why Ethereum looks set to rally towards $6K in 2021
Ethereum Technicals Now Point To A $5,000 Price Target
Every aspect on the technical point favors bulls and long-term believers in Ethereum and its native blockchain asset. For starters, the ETH/USD pair’s recent price movement and relative strength index (RSI) share an upward trajectory. From a charting perspective, this is a textbook indication of an impending rally.
Ether’s overall trajectory from pre-Mar crash levels to date fits a cup and handle pattern. A cup and handle represent a technical formation where the cup (price downtrend and uptrend) follows a “u” shape and the handle has a slight downward drift. The setup presents buy opportunities where the handle concludes. Traders across all financial markets leverage the pattern to spot buy opportunities to log long-term profits.
Related: Ethereum ETF launch, bullish technicals point to $15K ETH price in 2022
Hence, if the said setup plays out, ETH claiming $5,000 is quite a plausible possibility. Some crypto market observers have even called for the second-ranked crypto asset to top $5,000 by Monday.
However, while technical pointers provide strong arguments in favor of Ether’s near-term bullish outlook, fundamental factors corroborate ETH’s rallying narrative.
Increased Ethereum’s Address Activity And Exchange Outflows
According to cryptocurrency market tracker, Santiment, Ethereum’s address activity bottomed out in September. However, with the advent of Uptober, blockchain traffic on the largest smart contract blockchain picked up in earnest.
“#Ethereum’s latest address activity is up about 48% since the number of unique $ETH addresses bottomed out in late September.”
observed Santiment
On the flip side, the divergence between price and trading volume has widened. The same goes for other metrics such as social, on-chain, and network profit loss. Such divergences, according to Santiment, present a bearish picture.
Whether or not ETH prices will come crashing down remains to be seen. But for now, the bullish sentiment holds strong. Especially in a scenario where the USD value of Ether tokes flowing out of cryptocurrency exchanges superseded the inflow.
Related: Ethereum targets $6.5K as exchange outflows reaches record levels
