Ethereum [ETH] has experienced a remarkable 64% rally over the past 19 days, signaling a potential early recovery phase fueled by falling exchange reserves and increased accumulation. Despite the recent surge, market analysts are closely monitoring ETH’s next move, particularly as it approaches key liquidity levels.
The Pectra upgrade announcement has played a pivotal role in bolstering Ethereum’s bullish sentiment. Unlike previous cycles, this upgrade attracted more than just retail staking participants, with institutional interest evident in the shift in staking inflow trends. Additionally, the increased spot ETH ETF flows serve as another indicator of growing market confidence. Approximately three weeks ago, ETH rallied 12% in a single day, rising from $1,580 to $1,770. While the initial surge was followed by a brief pause, the bullish momentum has yet to fully dissipate.
However, concerns about profit-taking activity remain pertinent. The percent supply in profit metric, which fell to levels not seen since November 2022, has surged significantly in the past three weeks. Nevertheless, it is still below the 95% threshold that typically signals overheated market conditions. This suggests that ETH could have more room to run before significant profit-taking commences.
Data from Coinalyze indicates that spot demand has been substantial over the past month, reinforcing the organic nature of the current rally. The 6-month ETH liquidation heatmap highlights potential upside targets at $2,718 and $2,878, both of which present sizable liquidity pockets that could drive ETH higher. Meanwhile, the 3-day chart identifies a supply zone between $2,750 and $2,820, aligning with the heatmap data and presenting a potential bullish target for traders.
As ETH continues its upward march, the question remains: Will the rally extend above $3,000, or will short-term holders lock in profits, stalling the advance? Analysts suggest that consolidation beneath the $3,000 level might be necessary for Ethereum to gather the momentum needed for the next breakout phase.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
Also Read: Ethereum Whales Split as ETH Price Hits $2,400 – Is a Major Rally Ahead?
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