Ethereum, mirroring the general trend among altcoins, faces intense selling pressure and continues to grapple with the weakness that emerged in early August. Despite moments of strength following the significant sell-off on August 5, current prices persist below the $2,800 mark. Nonetheless, there is a silver lining visible on the daily chart: the impressive resilience of the bullish traders. Amidst the consistent decline, buyers have managed to absorb the substantial selling pressure, maintaining prices above the crucial $2,500 level.
However, the bearish trend remains intact. One analyst believes the rejection of prices falling below $2,500 is a pivotal point. In a recent post on social media platform X, the analyst emphasized that to sustain the uptrend, bulls must ensure Ethereum remains above $2,500. This round number is significant as it represents the base of the bull flag, according to the price trends observed in the daily chart.
In recent trading sessions, following a spike on August 8, Ethereum has been oscillating below the resistance zones of $2,700 and $2,800, while support is steadfast at $2,500. The consolidation of price action has resulted in the formation of a bull flag, an indication of underlying strength.
The same analyst suggested that if the $2,500 support holds firm, Ethereum could rally, potentially reaching $3,150 in the next trading session. This recovery would be a welcome change, especially in light of the bearish breakout that occurred between August 1 and 5, which saw prices breach crucial support zones established from April to July 2024.
Factors contributing to Ethereum’s potential rise include the influx into spot Ethereum ETFs. Since the approval of spot ETFs in July, institutions have shown increasing interest in gaining exposure. An ETF analyst reported that inflows now exceed $2 billion, particularly driven by BlackRock’s iShares Ethereum ETF, excluding outflows from Grayscale’s ETHE.
Additionally, Ethereum co-founder Vitalik Buterin noted several positive developments that could further support prices. These include a reduction in gas fees on the mainnet and through layer-2 solutions like Base. Enhancements in decentralization efforts by projects like Arbitrum and Optimism are also notable. Despite a recent audit prompting Optimism to revert to a centralized fault-proof system to address certain flaws, these efforts are seen as steps toward strengthening Ethereum’s overall ecosystem.
