Ethereum, along with the majority of altcoins, is currently facing notable selling pressure as it struggles to recover from the weakness experienced in early August. Despite brief moments of strength following a steep sell-off on August 5, prices are still hovering below the $2,800 mark. However, there is a ray of hope on the daily chart as bulls demonstrate impressive resilience in the face of ongoing selling pressure, managing to keep prices above the crucial $2,500 level.
An analyst highlighted the significance of Ethereum staying above $2,500 for the uptrend to remain intact. This level is seen as a critical support point that also serves as the base of a potential bull flag formation when analyzing price movements on the daily chart. In recent trading sessions, Ethereum has remained below resistance levels at $2,700 and $2,800, while finding solid support at $2,500. The formation of a bull flag pattern suggests underlying strength in the market sentiment.
The analyst’s outlook is optimistic, with a prediction that Ethereum could potentially surge to $3,150 in the near term if buyers continue to defend the $2,500 support level. This recovery comes as a relief following the bearish breakout during the sell-off from August 1 to 5, which breached critical support levels established between April and July 2024.
In addition to the market trends, the analyst also pointed towards the influence of spot Ethereum ETFs on prices. The approval of spot ETFs in July has led to significant institutional inflows, with inflows surpassing $2 billion, excluding outflows from Grayscale’s ETHE. Notably, BlackRock’s iShares Ethereum ETF has been a major contributor to this demand, driving prices higher.
Beyond the influence of spot ETFs, Ethereum co-founder Vitalik Buterin highlighted positive developments that could support price appreciation. These include the decrease in gas fees on the mainnet and through layer-2 solutions like Base. Moreover, efforts towards decentralization by projects like Arbitrum and Optimism are seen as significant contributors to Ethereum’s future growth potential.
While Ethereum continues to face selling pressure and resistance at key price levels, the market sentiment remains cautiously optimistic. The ability of bulls to defend the $2,500 support level and the positive developments within the Ethereum ecosystem are crucial factors to watch in determining the potential direction of price movements in the coming sessions.