Ethereum Could Rally 15% as Inverse Head-and-Shoulders Forms
Ethereum price could be poised for significant upside as it forms a bullish reversal setup, as inflows into spot Ethereum ETFs return after a week of downturn. Summary Ethereum price is down 8% from its weekly high…
Ethereum may be setting up for a sizeable rebound after recent weakness, as on-chain flows and technical structure point to potential upside.
Key points
- ETH is about 8% below last week’s high and roughly 37.1% off its August all-time high.
- Exchange balances have fallen to a record low (around 8.7%) while staking, restaking and digital asset treasuries (DATs) accumulate.
- A multi-year inverse head-and-shoulders pattern is forming on the weekly chart, suggesting a possible bullish reversal.
Market snapshot
As of the morning of Dec. 15 (Asia time), Ethereum (ETH) was trading near $3,113. The recent pullback followed waning network activity, profit-taking and broader market liquidations amid macro uncertainty.
On-chain and flows
Centralized exchange reserves of ETH have dropped to an all-time low, indicating less immediate sell-side supply as more coins move into staking and long-term treasury holdings. Institutional accumulation appears to be part of that dynamic: U.S. spot ETH ETFs returned to net inflows last week, taking in about $209 million after a prior week of outflows. Reports also note that entities such as Tom Lee-led Bitmine added roughly $73.2 million recently to their ETH holdings. Lower exchange inventories typically reduce selling pressure, which can support price if demand sustains.
Technical outlook
Weekly price action shows a developing inverse head-and-shoulders formation—an extended bullish reversal pattern. ETH has climbed above the 50-day moving average, a level that historically has preceded stronger rallies, while the weekly RSI is trending higher, signaling accumulating buying momentum.
Targets and risk
The near-term upside target highlighted by technicians is around $3,600, about 15–16% above current levels and near the 61.8% Fibonacci retracement—an area traders often watch for resistance. On the downside, $2,760 (near the 38.2% Fibonacci retracement) could provide meaningful support if selling resumes.
Disclosure: This rewrite is for informational and educational purposes only and does not constitute investment advice.