Ethereum [ETH] led the broader altcoin market after surging by more than 18% in the past hours, at press time. Ethereum surges back above the $2,000 level as bullish momentum continues to push it to higher zones.
Leverage, new investors, supply dynamics, and a breakout from an accumulation pattern influenced this sudden uptick. Can bulls sustain this uptrend and stay above $2K?
ETH exchange supply falls 15%
For leverage, a whale created a fresh wallet and loaded $20 million in USDC on the Hyperliquid exchange. The amount was deposited in three transactions of $10 million, $9.41 million, and $589K. Then, the whale opened a 4x leveraged long position of 20K ETH, worth $45.38 million.
The position coincided with the sudden surge, suggesting the whale could be privy to the move. Technically, Ethereum was about to breakout from a sideways range. As a result, the whale is sitting at an unrealized profit of $6.66 million.
Ethereum Spot ETFs added to the buying pressure, as per data from SoSoValue. Participants bought $189.15 million prior to the 18% move, the largest single-day buying volume in 10 months.
ETH Spot ETFs by BlackRock, Fidelity, and Grayscale led the pack with $122 million, $36.54 million, and $16 million, respectively. Even from a broader perspective, investors still bought Ethereum aggressively.
According to Santiment data, the exchange supply of ETH declined by 15% in eleven weeks. The supply plunged from 7.70 million on the 2nd of June to 6.54 million on the 18th of August, with roughly 1.15 million ETH coins withdrawn.
Can ETH’s price reach $2,500?
The charts showed the altcoin first hinted at a bottom on the 6th of June, after rebounding at $1,549. The potential bullish reversal was reinforced by the double bottom whose neckline at $1,800 was broken through.
The retest of the breakout lasted for a month before the eventual breakout. Now, Ethereum appears to be headed toward $2,500. The Bull/Bear Power (BBP) has hit its highest level this year, at about 528 as of writing. Additionally, large transaction count has increased from 2,690 to 6,910, almost a 3x increase in a day.
While this move is a signal of shifting market structure, bulls need to push ETH past $2,500 for a confirmation. The zone acts as the most recent lower high of the existing bearish market structure.
If the zone were turned into support, Ethereum would turn bullish in the midterm. Otherwise, the supply zone of $2,500 could reverse the current aggressive buying pressure, though it looks unlikely.
Final Summary
- Ethereum rallied over 18% as ETH Spot ETFs saw their largest single-day inflows in 10 months.Â
- ETH price action is bullish in the short term but needs to flip $2,500 to shift the market structure to bullish in the mid-term.Â
