Ethereum Price Shows Bullish Divergence Despite Low Whale Demand
As Bitcoin holders anticipate the $100K milestone, Ethereum's price is encountering significant resistance between $3,380 and $3,427. With a fully diluted valuation of approximately $402 billion and a daily average traded volume of around $56 billion, Ethereum gained about 9% on Thursday, indicating a potential upward movement.
The ETH/USD pair recently broke out of a falling channel that started in mid-March, following a rise of over 35% in the last three weeks. This has contributed to bullish momentum in the broader altcoin market, led by Solana and XRP, amid increased FOMO trading activity.
Factors Supporting Bullish Sentiment for Ethereum
The Ethereum ecosystem remains dominant in the web3 space, despite recent growth from Solana. It is favored by institutional investors for tokenizing real-world assets due to its proven security and active development. High demand for Ethereum is evident from its substantial daily trading volume. Onchain analytics provider Cryptoquant reported that Ethereum futures open interest across all crypto exchanges surpassed $20 billion, marking a new all-time high.
Nevertheless, Ethereum's bullish momentum has lagged behind Bitcoin recently, influenced by the underperformance of spot Ether ETFs. Grayscale’s ETHE has experienced significant cash outflows since SEC approval earlier this year, losing over $3.3 billion. Consequently, increased Ether supply on centralized exchanges has dampened bullish sentiment.
Midterm Target
Over the past three years, Ethereum has been declining against Bitcoin as traditional capital markets enter the web3 space. The ETH/BTC pair has been rapidly decreasing since May, contributing to Bitcoin's rally above $99K. However, a rebound in the ETH/BTC pair appears likely soon, with potential changes in weekly Bitcoin dominance and bearish divergence in the Relative Strength Index (RSI).
A massive bullish divergence starts to wake up on $ETH. It's a great sign. pic.twitter.com/4agR78hKnm
— Michaël van de Poppe (@CryptoMichNL) November 22, 2024
From a technical analysis perspective, if Ethereum closes this week above $3,400, it is likely to maintain a bullish outlook through November. In this case, Ether could target a rally towards $4K, setting the stage for potential price discovery in early 2025.