Key Points
- Ethereum shows signs of recovery, potentially due to increased demand from whales.
- Despite a positive outlook, a sustained rally for Ethereum may not be realistic.
Ethereum’s recovery is underway after a period of struggle to establish a bullish stance.
This recovery seems to be a reflection of the overall improvement in market sentiment, but a specific factor might have given Ethereum’s bulls a boost.
Correlation Between Bitcoin Dominance and Ethereum’s Price
A strong correlation has been noted between Bitcoin’s dominance and Ethereum’s price downside for several months this year, with the BTC.D chart reaching a YTD high of 58.59%.
Ethereum is regaining its bullish momentum around the time that BTC.D has begun to decline, indicating a shift in liquidity flows favoring altcoins, with Ethereum reaping the benefits.
Whale Activity and Ethereum
The recent rally saw a 16% upside in the last week, following weeks of struggles to break free from its local bottom range.
Our metrics show that whales have been actively leading the recent rally, with their balances growing since the beginning of September.
Historical concentration data reveals that as of September 1st, Ethereum whales held 58.12 million Ethereum in their addresses, increasing to 58.48 million coins as of the latest data on September 23rd.
The whale address balances grew by approximately 360,000 coins in about three weeks, equivalent to $949.68 million worth of Ethereum at the current market value.
Large holder inflows have seen growth in recent days, with inflows spiking from 101,740 coins on September 14th to 675,000 coins as of September 19th.
On September 23rd, Ethereum’s large holder inflows soared from below 96,000 Ethereum to over 515,000 Ethereum.
In contrast, large holder outflows reached their highest spike this month between the 18th and 19th of September, bouncing from 150,340 coins to almost 590,000 coins.
Outflows were at 241,000 coins as of September 23rd, indicating that address inflows (demand) were higher than sell pressure.
Ethereum’s Future
Ethereum’s current bullish run could be seen as a sign of recovery, leading many traders to anticipate a continued rally.
However, a continuous rally may not be sustainable.
Short-term momentum might push the cryptocurrency closer to the $2,800 to $2,900 price range, a range that has previously acted as a support and resistance zone.
As Ethereum moves into this zone, there could be a higher likelihood of profit-taking and increased sell pressure.
Ethereum’s RSI was at 60.03 at the time of writing, indicating it was not yet overbought.
