According to a recent analysis from a CryptoQuant analyst, the behind the scenes of this price struggle for ETH has been quite interesting, with the asset seeing a significant shift in its netflow.

This shift in Ethereum鈥檚 netflow could have significant implications for ETH, potentially influencing the market’s reaction positively or negatively.

Dissecting The Ethereum Netflow

The CryptoQuant analyst Amr Taha revealed in a recent post on the CryptoQuant QuickTake platform that Ethereum has recently experienced a spike in netflows, with approximately 96,000 ETH moving into derivative exchanges.

According to Taha, this influx could indicate that traders are positioning for potential price shifts, as large transfers to derivatives platforms have historically preceded periods of increased volatility or even corrections.

Taha鈥檚 analysis, backed by previous spikes in May and early July, suggests that Ethereum’s current activity might foreshadow a heightened period of market movement. The analyst wrote:

The latest spike in netflow could signal another period of heightened market activity, potentially a price correction or a sharp move based on trader positioning.

Market Sentiment Drawn From Bitcoin

In addition to Ethereum鈥檚 netflows, Taha delved into Bitcoin鈥檚 Futures Sentiment Index, observing that this metric shows peaks in sentiment that may serve as indicators of broader market behavior.

He pointed out three instances where the sentiment index spiked, marked by red-circled peaks (in the chart above), each time coinciding with a local market top. This trend implies that, following peaks in trader sentiment, Bitcoin鈥檚 price typically experiences a decline.

The sentiment index, thus, can serve as a “contrarian indicator”鈥攚hen optimism peaks, price corrections often follow. These sentiment patterns may signal that investors should brace for potential volatility for Ethereum, which is highly correlated with Bitcoin.

Meanwhile, Ethereum has continued to hover somewhere below $3,000. So far, the asset has registered a correction in the past week, dropping by 3.1%. However, the past day performance is attempting to be more positive.

Over this period, Ethereum has seen a slight increase of 0.9%, rising to as high as $2,559 earlier today before now trading for $2,541, at the time of writing.

Despite the notable fluctuation the asset has seen in the past week alone, rising to above $2,700 and dropping below $2,500, Ethereum daily trading volume seems to have maintained composure.

Data from Coingecko shows that this metric has remained between $15 billion and $19 billion in the past week with no major spike or decline.

Featured image created with DALL-E, Chart from TradingView

According to a CryptoQuant analyst, Percival, Ethereum鈥檚 open interest has increased significantly, indicating rising investor optimism for a potential rally.

Potential For Ethereum Rally And Longs Benefit

According to the data shared by Percival, Ethereum鈥檚 open interest stands at $9.6 billion, marking a 28.57% increase from August, although it is still below the $13 billion recorded in June.

The rise in open interest points to expectations of an upward price movement, with many traders positioning themselves for increased demand.

Percival noted that several factors, including potential Federal Reserve interest rate cuts and a growing focus on the future of tokenization on the Ethereum blockchain, may fuel this uptick.

This shift could drive more interest toward decentralized finance (DeFi) protocols, making Ethereum more attractive for investors looking for long-term gains.

Percival also highlighted that Ethereum鈥檚 Relative Strength Index (RSI) is at 61, suggesting that the market is overheated.

A “convergence” between open interest and RSI levels indicates that price corrections will likely be short-lived, providing opportunities for traders to position themselves for a market rebound.

The analyst estimated that Ethereum may experience a correction of around 7% to 9% before rallying again, favoring long positions as traders await a potential rise in both price and demand.

The analyst particularly wrote in a post on the CryptoQuant QuickTake platform:

The convergence of the highest lows in the RSI suggests a potential for a less pronounced correction, estimated to be between 7% and 9%. This scenario favors long positions, with traders patiently waiting for a market rebound to confirm new highs and higher lows.

ETH鈥檚 Path To A Bullish Breakout

At the time of writing, Ethereum trades at $2,611, down slightly by 0.1% in the past 24 hours. This comes after a strong week where the cryptocurrency saw a 9.3% increase and a nearly 15% rise over the past month.

According to another prominent crypto analyst, Ali, Ethereum could be on the verge of a significant rally. In a recent post on X, Ali revealed that Ethereum has recently touched the lower boundary of a channel, a level that has historically led to an average 130% price surge.

According to Ali, should this pattern continue to hold, Ethereum could potentially climb to $6,000 as long as it maintains its key support level of $2,300.

Every bounce off this channel鈥檚 lower boundary has historically led to an average 130% price increase for #Ethereum.

If this pattern holds, a similar move could push $ETH to $6,000鈥攑rovided the key $2,300 support level stays intact. pic.twitter.com/CFpLrQWEih

鈥?Ali (@ali_charts) October 14, 2024

So far, despite ETH’s market’s volatility, the asset has managed to maintain its price above the critical $2,300 support level, which lends credibility to the theory that a bullish breakout could be on the way.

Featured image created with DALL-E, Chart from TradingView

According to recent data from IntoTheBlock, large Ethereum holders, often called whales, have been actively accumulating Ethereum over the past month.

The Quiet Accumulation Of ETH From Whales

IntoTheBlock reported via its X account that Ethereum鈥檚 large holder net flow has increased notably over the past 30 days. Specifically, whale wallets, which hold more than 0.1% of Ethereum’s total supply, have recorded consistent net outflows, signaling “accumulation.”

According to the data, net outflows were recorded on just three days in the last month, meaning these large holders were predominantly adding to their positions.

In total, over 1.7 million ETH were accumulated during this period, with 175,000 ETH purchased in the last two days alone IntoTheBlock suggests that this strong accumulation behaviour from large holders typically indicates confidence in the asset鈥檚 long-term potential.

Over the past 30 days, ETH whale wallets have been actively accumulating, with net outflows recorded on only three days.

The large holder netflow indicator tracks when wallets holding more than 0.1% of the total supply are buying or selling.

In total, these wallets have鈥?pic.twitter.com/om1UM9tArf

鈥?IntoTheBlock (@intotheblock) October 16, 2024

Ethereum Price Performance And Outlook

While large holders have been expressing confidence through their accumulation behavior, Ethereum鈥檚 price appears to be gradually reflecting this phenomenon. Over the past week, Ethereum has added around 5.9% to its value, reclaiming its ground above the $2,600 price mark.

In the last 24 hours, the asset has seen a slight increase of 1.3%, bringing its current trading price to $2,616, at the time of writing. Additionally, Ethereum’s daily trading volume has also increased significantly in the past week from below $14 billion last Wednesday to currently above $18 billion as of today.

Amid this price performance, crypto analyst CrediBULL shared his latest outlook on Ethereum. In a post on X, the analyst expressed concerns over Ethereum鈥檚 relative weakness against Bitcoin.

CrediBULL noted that while Ethereum showed some initial signs of strength, it failed to clear local highs during the most recent rally. This underperformance has led the analyst to believe that Ethereum may continue to struggle against Bitcoin in the short term.

Haven’t updated $ETH in a while. Has been showing considerable weakness against BTC recently (along with most alts).

While I had hoped for a short term window of outperformance before the final drop to sub 2k it doesn’t seem like we are going to get that at this time.

ETH鈥?pic.twitter.com/CZJOoElHp3

鈥?CrediBULL Crypto (@CredibleCrypto) October 15, 2024

Featured image created with DALL-E, Chart from TradingView

This drop follows a brief price surge last week, where Ethereum saw a slight surge to above $2,600. Despite the minor increase, Ethereum remains down by 51% from its all-time high of $4,878, recorded in 2021.

Ethereum Potential To Fall 53%

The sideways movement in Ethereum鈥檚 price has left traders cautious. Amid this, renowned crypto analyst Ali has offered his perspective on Ethereum鈥檚 current trajectory in a recent post on X.

Ali pointed out that Ethereum鈥檚 price action tends to follow a particular pattern based on TD Sequential indicators. He explained that whenever Ethereum breaks above the TD setup resistance trendline, a strong bull run often ensues.

However, when Ethereum dips below the TD setup support trendline, it typically results in a significant price correction. According to Ali, Ethereum is nearing a critical support level of $2,250, warning that if this support is breached, it could trigger a major price drop.

Ali further emphasized that ETH has previously seen an average of 53% corrections following similar breakdowns, suggesting that losing the $2,250 level could spell trouble for the cryptocurrency.

Each time #Ethereum breaks above the TD setup resistance trendline , a strong bull run follows. But when $ETH breaks below the TD setup support trendline , we’ve seen an average 53% correction.

The key support now is $2,250鈥攍osing it could trigger a significant price drop. pic.twitter.com/PljkRda78S

鈥?Ali (@ali_charts) October 10, 2024

On The Flip Side

While Ali expresses concern over Ethereum鈥檚 potential for a significant downturn, other analysts remain optimistic about its long-term potential.

A crypto analyst going by the name EtherNasYoNAL on X recently shared a bullish outlook for ETH, suggesting that the cryptocurrency could be on the verge of entering a new 鈥渕ega bull鈥?cycle.

According to the analyst, ETH is currently in the final stages of what they describe as a 鈥渞etest and accumulation process.鈥?This phase is reminiscent of Ethereum鈥檚 price movements in 2020, where it underwent a similar process before the 2021 mega bull run.

The analyst added that Ethereum鈥檚 price action in the months of August, September, and October 2020 followed a specific pattern, with accumulation and retests before the asset saw a significant rise.

EtherNasYoNAL believes Ethereum is currently mirroring this process and is poised to enter another mega bull cycle, expected to occur around 2025.

Despite the current decline, the analyst remains confident that Ethereum鈥檚 long-term trajectory is still bullish, encouraging investors to remain patient and await the expected price surge.

#Ethereum winks at the 2025 mega bull!

Before the 2021 mega bull, we witnessed the retest and accumulation process in August, September and October 2020.$ETH is in the final stage of the retest and accumulation process in August, September and finally October before the 2025鈥?pic.twitter.com/VsE36le746

鈥?E岽浭溼磭蕗N岽�隃笔忈磸纱岽�L (@EtherNasyonaL) October 9, 2024

Featured image created with DALL-E, Chart from TradingView

Particularly, according to a recent analysis by a CryptoQuant analyst under the pseudonym ‘Darkfost,’ a noticeable shift in ETH’s investor behaviour is taking place.

So far, larger holders of Ethereum and smaller retail investors are exhibiting signs of inactivity, while mid-sized holders show a measured increase in their holdings.

This divergence in strategies among these market participants may provide insight into Ethereum’s market sentiment, especially as it faces a decline in dominance, Darkfost revealed.

Detailing The Holders Divergence

Darkfost points out that Ethereum addresses holding more than 100,000 ETH have been largely inactive. This trend is also visible among retail addresses, which typically accumulate smaller amounts of ETH.

In contrast, addresses holding between 10,000 and 100,000 ETH are slowly buying more Ethereum. At the same time, addresses holding between 100 and 1,000 ETH continue to sell off their holdings steadily.

This diverse behavior among different investor segments suggests a complex market outlook for Ethereum. The inactivity of large holders, those with balances exceeding 100,000 ETH, is notable, given their potential impact on the market.

Usually, large holders include institutional investors, exchanges, and major entities that can significantly influence market trends.

Their current reluctance to engage in either buying or selling suggests uncertainty about Ethereum’s near-term prospects. This hesitation might reflect broader market factors, such as the upcoming US Fed rate cuts or the overall performance of the crypto market.

Notably, with the US fed rate cut approaching, large Ethereum holders might be sitting on their hands to see how the market will play out before they put their feet back in the market.

On the other hand, mid-sized investors, specifically those with 10,000 to 100,000 ETH, are gradually accumulating Ethereum. This slow but steady buying indicates a cautious optimism among this group of investors.

These mid-sized holders often represent smaller institutions, crypto funds, or high-net-worth individuals who may be looking to capitalize on potential price gains without significantly impacting the market.

Their gradual accumulation could signal a belief in Ethereum’s long-term potential, even if immediate gains appear uncertain.

Ethereum Current Market Performance

Following an initial rally rising by nearly 5% yesterday, Ethereum has now seen a noticeable pullback in price, dropping below $2,400 once again. Currently, the asset trades at a price of $2,299, at the time of writing down by 2.1% over the past day alone.

Interestingly, despite the noticeable decline, ETH’s daily trading volume remains intact, at roughly above $14 billion from yesterday until now.

Featured image created with DALL-E, Chart from TradingView

The analyst reported on the CryptoQuant QuickTake platform that Ethereum’s futures market has shown its lowest funding rates of 2024. This trend indicates that traders in the perpetual futures market are currently less optimistic about Ethereum’s short-term price movements.

Ethereum Declining Funding Rates And Market Implications

According to ShayanBTC, the 50-day moving average of Ethereum鈥檚 funding rates has been on a consistent downward trend, indicating a persistent bearish outlook among futures traders.

For context, funding rates in perpetual futures contracts are payments made between long and short traders based on the difference between perpetual futures and spot prices.

When funding rates are positive, it implies that long traders pay short traders, suggesting bullish sentiment. Conversely, negative funding rates mean short traders pay long traders, signaling a more bearish market stance.

In the case of Ethereum, the current negative trend in funding rates highlights a lack of buying interest in the perpetual futures market. Shayan noted:

For Ethereum to recover and reach higher price levels, demand in the perpetual futures market must increase. If the current trend of negative funding rates continues, it is likely that Ethereum will experience further price declines in the mid-term.

Is A Rally Still Possible?

The impact of these bearish funding rates has been quite evident in Ethereum’s recent performance. So far, the cryptocurrency has experienced a consistent decline, dropping by 4.9% in the past 24 hours alone.

This decline has dragged Ethereum’s price below the $2,300 mark, compounding its losses over the past month to more than 10%. The persistent bearishness is partly attributed to the “lack of buying interest” in the futures market, as noted by the CryptoQuant analyst.

Despite the negative sentiment in the futures market, some analysts remain optimistic about Ethereum’s potential for a rebound. One such analyst, Koroush AK, expressed a more positive outlook, suggesting that Ethereum is due for a significant bounce.

Koroush pointed to higher time frames, highlighting the 100-week moving average and the key psychological support level at $2,000 as potential catalysts for a recovery. He anticipates a 10-20% bounce for Ethereum in the coming weeks despite the current market conditions.

$ETH

Ethereum due a large bounce.

Zooming out and looking at the higher time frames;

-100 week moving average -Key psychological support ($2000)

Expecting a 10-20% bounce over next few weeks. pic.twitter.com/THPPc99oMf

鈥?Koroush AK (@KoroushAK) September 16, 2024

Notably, while negative funding rates often reflect a bearish market sentiment, they can also be early indicators of potential market recovery. Negative rates can result in short liquidation cascades, where short positions are forced to close, leading to a sharp price reversal.

Featured image created with DALL-E, Chart from TradingView

In a recent post uploaded on X, renowned crypto analyst Javon Marks has laid out an optimistic scenario for Ethereum, suggesting a potential price surge similar to a pattern witnessed in 2023.

Key Level To Watch For A Rally To $8,100?

According to Marks, Ethereum is poised to replicate a previous pattern that led to a more than 160% surge. In the post on X, he states, “ETH looks to have replicated a pattern from 2023 that led into an over +165% climb, and it’s looking to be ‘GO TIME’ again.”

Marks has set a target price of $4,723.5, adding that a break above this price mark could bring in the possibility of Ethereum reaching above $8,100. This projection suggests a near doubling of Ethereum鈥檚 current price if this trend materializes.

$ETH (Ethereum) looks to have replicated a pattern from 2023 that led into an over +165% climb and it’s looking to be “GO TIME ” again!

2023 looks to have been the blueprint for another massive upside that can be soon transpiring in this crypto market.

Target is at $4,723.5鈥?pic.twitter.com/a1ePw6wpF3

鈥?JAVONMARKS (@JavonTM1) September 15, 2024

Despite this optimistic forecast, Ethereum’s recent market performance has shown bearish tendencies. In the past 24 hours alone, ETH has declined by 4.5%, causing its price to fall below the $2,400 mark鈥攁 level it briefly traded above over the weekend.

Ethereum Price: On The Flip Side

While Javon Marks鈥?analysis points towards a bullish future for Ethereum, other market analysts have outlined the critical support zones that Ethereum must hold to prevent further decline.

Ali, another well-known crypto analyst, has highlighted a crucial support range between $2,290 and $2,360. This zone, according to Ali, is significant as it is where roughly 1.90 million addresses hold around 52.30 million ETH.

Ali warns that if Ethereum fails to maintain this support, a sell-off could ensue, potentially driving the price toward the $1,800 level.

Notably, a breach below this range would be quite detrimental to the ETH market as it would not only trigger a significant amount of liquidations but also invalidate the bullish predictions and lead to a further downtrend, marking a substantial shift in the market sentiment.

Key support for #Ethereum lies between $2,290 and $2,360, where 1.90 million addresses hold ~52.30 million $ETH. If this demand zone breaks, we could see a sell-off driving #ETH toward $1,800. pic.twitter.com/ubP9ZZd8H0

鈥?Ali (@ali_charts) September 15, 2024

Featured image created DALL-E, Chart from Tradingview