The price of Ethereum (ETH) showed a dazzling rally, rising 20% last week. This rally was partly fueled by the massive outflow of ETH from exchanges, suggesting that holders' confidence is growing. The accumulation by whales has also increased, leading to a stronger bullish sentiment.
However, after experiencing a slight correction recently, ETH is at an important juncture, testing support and resistance levels to determine its next move.
More ETH is leaving cryptocurrency exchanges
ETH has continued its strong rally, rising 20.10% in the last 7 days. On October 25th, a significant outflow of 361,000 ETH from exchanges was observed, indicating that holders' trust has been growing before the current rally.
Such a large movement generally suggests that investors are moving their assets to personal wallets and planning to hold rather than sell.
When a large amount of coins are withdrawn from exchanges, it is generally interpreted as a bullish sign, indicating that users are less likely to sell. Conversely, a large influx of coins into exchanges may suggest that holders are preparing to sell, which could be seen as a bearish signal.
The net transfer volume to exchanges has fluctuated between positive and negative, reaching 128,000 on November 10th, indicating that the market is experiencing a mix of buying and selling pressure.
The number of whales holding at least 1,000 ETH has started to increase again
After weeks of decline, the number of whales holding at least 1,000 ETH has finally started to increase again. This trend reversal began on November 7th and has been steadily increasing daily - from 5,527 on November 7th to 5,558 on November 12th.
The re-accumulation among whales suggests a change in sentiment, as large holders are becoming more confident in ETH prices.
Tracking these whale wallets is important because their activity can significantly impact market trends. When whales start accumulating, it generally suggests the potential for price appreciation, as these holders often drive the market.
Their buying also reduces the available supply on exchanges, potentially adding upward pressure on Ethereum prices.
The uptrend in ETH's moving averages has 'paused'
After a strong rally, ETH prices have experienced a slight correction over the past few days. ETH's exponential moving averages (EMAs) are still in a bullish state, with the short-term line still above the long-term line, indicating an overall uptrend.
However, the price has fallen below the shortest EMA line, suggesting that the current uptrend may have lost some momentum.
The nearest resistance level for ETH is currently $3,500. If this resistance is broken, ETH prices could surge to $3,700, a potential 17.9% increase, which would be the highest level since June.
However, if the uptrend reverses, ETH prices could retest support at $3,000. If that fails, the next support level would be $2,800.
