Ethereum poised for 20% surge after buying pressure from ETF investors, analyst says

Ethereum (ETH) started the week with a slight gain of 1%, signaling a possible upward movement of up to 20%, driven by the growing interest of traditional investors in ETH ETFs. However, the cryptocurrency could still face challenges due to potential selling by large investors, known as “whales”, and resistance at a crucial trendline, according to analysis by Michael Ebiekutan.

Ethereum ETFs saw a net inflow of $155 million last week, the largest amount of any digital asset, according to data from CoinShares. The inflow suggests that traditional investors took advantage of the recent market correction to buy ETH at lower prices.

In particular, BlackRock’s Ethereum ETF, the iShares Ethereum ETF (ETHA), is on track to hit the $1 billion mark in cumulative net inflows, after surpassing $900 million last week.

Ethereum Price Analysis

With Grayscale’s ETHE outflows slowing down and the broader market recovering, ETH ETFs are expected to positively influence the cryptocurrency’s price in the coming weeks.

However, some whales are still liquidating their positions, which could create selling pressure in the short term. Data from Lookonchain shows that one such whale deposited 5,000 ETH, worth $13.2 million, into the OKX exchange recently. This same whale has been depositing ETH into OKEx since July, potentially selling a total of 48,500 ETH, worth $154 million.

Ethereum is currently trading at around $2,644, down just over 1% on the day. Over the past 24 hours, the cryptocurrency has seen $55.71 million in liquidations, with $35.09 million of those being longs and $20.62 million of those being shorts.

According to analyst Ebiekutan, ETH is attempting to break above the resistance at $3,723, a level that has already been rejected twice in the past week. This resistance coincides with a trendline that suggests ETH could drop to a low around $2,020.

ETH goes up or down?

Despite these challenges, there are signs that buying momentum is gaining momentum. The Relative Strength Index (RSI) is at 41 and crossing above its moving averages, suggesting an increase in bullish momentum. Additionally, the Stochastic Oscillator (Stoch) also points to a possible shift in favor of buyers.

The potentially positive momentum is reinforced by the over 4% increase in ETH futures open interest (OI), which is now close to $11 billion, and the rise in ETH’s long/short ratio to 1.01. Rising OI during a price recovery often indicates the potential for further growth.

Ethereum could see a 20% increase in value, reaching the $3,368 range, where it faces significant resistance. Furthermore, the 100-day Simple Moving Average (SMA) could act as resistance, especially after the “Death Cross” that occurred last Thursday.

However, this bullish scenario could be invalidated if ETH drops below the support around $2,020.

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