ETHEREUM SET FOR A POTENTIAL 15% RALLY ON EMERGING INVERSE HEAD AND SHOULDERS
Ethereum may be gearing up for a significant rally, forming a bullish reversal pattern as inflows into spot Ethereum ETFs return following a brief downturn.
As of Dec. 15 morning (Asian time), Ethereum was trading at $3,113, down 8% since last Thursday and roughly 37.1% below its all-time high hit in August. The recent decline has been driven by lower network activity, profit-taking, and cautious investor sentiment amid macroeconomic concerns and large-scale liquidations affecting the broader crypto market.
Despite the recent weakness, several factors suggest Ethereum could be entering a consolidation phase ahead of a potential upside.
First, the supply of ETH held on centralized exchanges has fallen to a record low of 8.7%—the lowest since the network’s launch in 2015. Much of this reduction is due to staking, restaking, and accumulation by digital asset treasuries (DATs). Notably, Bitmine, led by Tom Lee, added another $73.2 million to its holdings just yesterday. Historically, lower exchange balances reduce sell-side pressure, potentially supporting price gains if investor demand remains strong.
Second, U.S. spot Ethereum ETFs have returned to inflows over the past week, attracting nearly $209 million after a period of outflows. Increased institutional demand often signals bullish sentiment, adding further optimism for Ethereum’s near-term outlook.
Ethereum Technical Analysis: Bullish Reversal Pattern Points to 15% Upside
On the weekly chart, Ethereum appears to be forming a large inverse head and shoulders pattern, typically a strong indicator of a potential bullish reversal.
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Ether has also moved above its 50-day moving average—a key technical level that has historically preceded strong upward rallies.
The relative strength index (RSI) is trending higher, signaling that buying momentum for Ethereum is returning.
The immediate target for Ethereum is around $3,600, approximately 15.65% above its current price. This level also coincides with the 61.8% Fibonacci retracement, making it a critical resistance zone for traders.
On the downside, $2,760, near the 38.2% Fibonacci retracement, could serve as a major support level if selling pressure reemerges.
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Conclusion
Ethereum shows signs of a potential bullish reversal, supported by technical patterns, strong institutional demand, and declining exchange balances. While short-term volatility may persist, key indicators suggest upside potential toward $3,600. Traders should watch critical support at $2,760 and resistance at $3,600, keeping an eye on broader market conditions and ETF inflows for guidance.
FAQs
- What is Ethereum’s current price?
As of the morning of Dec. 15 (Asian time), Ethereum was trading around $3,113.
2. What technical pattern is Ethereum forming?
Ethereum is forming a large inverse head and shoulders pattern, signaling a potential bullish reversal.
3. What is the near-term target for Ethereum?
The immediate upside target is around $3,600, about 15% higher than the current price.
4. What support level should traders watch?
Key support lies at $2,760, corresponding to the 38.2% Fibonacci retracement.
5. What factors are supporting Ethereum’s potential rally?
Reduced exchange supply, ETF inflows, accumulation by major holders, and upward RSI momentum are all contributing to bullish sentiment.
