Key Ethereum takeaways
- ETH transfers to cryptocurrency exchanges have hit a 4-month low.
- Lesser traders are transferring Ether to their exchange wallets.
- They seem to prefer holding for the long haul.
- ETH/USD pair is holding above the multi-month Ascending Channel support.
JAIPUR (CoinChapter.com) – Ether, the second-largest digital asset in the cryptocurrency market, stoked bullish sentiment after ETH transfers to cryptocurrency exchanges hit a 4-month low. The data came in as Ethereum’s native blockchain asset held strong above the $4,500 support.
Diminishing exchange inflows translates to a rising ‘buying and holding’ mindset amongst traders/investors, a trait that picked pace since ETH/USD spot rates bottomed out in July 2021. Also, critical Ethereum upgrades such as the London Hard Fork (along with EIP-1559) and the Altair upgrades enabled a smooth transition to the much-awaited version 2.0 of the largest smart contract blockchain.
And in the process, introduced a disinflationary feature in the second-ranked cryptocurrency. That, in turn, boosted the ‘HODLing’ behavior amongst ETH market participants.
Related: Ethereum's Technical Setup Points to a $5K ETH Price Target
More On Dropping Exchange Inflows
As per the latest update on Ether exchange, inflows from Glassnode have been diminishing significantly.
Ether exchange inflows were highest during June 2021, a bearish phase triggered by Elon Musk’s tone reversal on Bitcoin and the miner exodus from China due to the government’s draconian ban then. But, exchange deposits dropped sharply from above 35,000 ETH below the 10,000 mark in July.
Numbers oscillated between the 7,000 – 15,000 ETH range, accompanied by massive withdrawals and rising ETH/USD spot rates. However, the latest figures show an exchange inflow drop to a seven-day moving average (7d MA) of almost 7,100 ETH, a new low not seen in the last four months.
Related: Ethereum exchange deposits drop to 2-year low as ETH nears its previous ATH
ETH Holding Above Multi-Month Support Amid Renewed Bullish Outlook
Supported by increased exchange outflows and rising bullish sentiment, Ethereum’s native currency strongly held the support at $4,500. A snapshot of the price action during the last week shows a sideways momentum buoyed by increased accumulation sentiment.
Bulls and long-term believers bought all available dips in anticipation of higher ETH price upsides in the near term. Technical analysis corroborated Ether’s rallying potential, as the ETH/USD pair tested the lower trendline of the Ascending Channel setup, active since October 2021.
A new higher low followed every retest of the Channel’s lower trendline. Bullish traders are now targeting a rally above $5,200, which coincides with the upper trendline of the Ascending Channel formation. ETH’s relative strength index (RSI), trending a little above 50, support’s the token’s near-term bullish outlook.
Also, technical charts showed a confluence of bullish formations. Ether prices tracked a cup and handle setup since May 2021’s high. 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.
Together the cup and handle pattern and the rising RSI trend hinted at buying opportunities. Ether stands to top $6,500 on the back of an increased influx of long bids. A close above $6,500 would open the gates for a rally towards $7,750.
Related: Ethereum targets $6.5K as exchange outflows reaches record levels
But first, traders need to claim the $5,200 resistance. So let’s see how that plays out.
