Ethereum price could be poised for significant upside as it forms a bullish reversal setup, with inflows into spot Ethereum ETFs returning after a week of downturn.
Summary
– Ethereum price is down 8% from its weekly high.
– Exchange balances have hit an all-time low amid accumulation by DATs.
– A multi-year inverse head and shoulders is forming on the weekly chart.
According to data from crypto.news, Ethereum (ETH) was trading at $3,113 at last check on Dec. 15 morning Asian time, down 8% since last Thursday and 37.1% from its all-time high reached in August this year.
The downtrend was driven by a drop in network activity, profit-taking, and risk-averse sentiment amid macro concerns and massive liquidations that hit the broader crypto market.
However, signs suggest Ethereum may be consolidating before a sizable rally. The proportion of ETH held on centralized exchanges has fallen to a record low of 8.7% since the network launched in mid-2015, as more ETH is moved into staking, restaking, and digital asset treasuries (DATs). Notably, Tom Lee-led Bitmine reportedly bought another $73.2 million recently.
Lower exchange balances typically reduce sell-side pressure, supporting price if demand holds. U.S. spot Ethereum ETFs also returned to inflows over the past week, drawing nearly $209 million after a week of outflows, reflecting renewed institutional interest.
Ethereum price analysis
On the weekly chart, Ether appears to be forming a large inverse head and shoulders pattern, often a precursor to a bullish reversal. Price has moved above the 50-day moving average, a level that has preceded strong rallies in the past, while the relative strength index has trended upward, signaling accumulating buying pressure.
The immediate upside target is around $3,600, roughly 15.65% above the current price and aligning with the 61.8% Fibonacci retracement level, a key resistance area for traders. On the downside, $2,760 — near the 38.2% Fibonacci retracement — could act as major support if selling resumes.
Disclosure: This article does not represent investment advice. The content and materials featured are for educational purposes only.
