Ethereum price has been under pressure recently. It dipped to $2,387 amid a broader market downturn driven by speculation regarding Tether’s regulatory scrutiny.
However, technical indicators and on-chain data paint a picture that Ethereum might be ready for a reversal. The sentiments around its short-term future are improving.
TD Sequential Presents Buy Signal
The TD Sequential indicator on the Ethereum 12-hour chart has also suggested a buy signal which is also a positive sign. According to technical analysis of the bearish trend, if the $2,412 support level is maintained, it is projected to bounce back to $2,665.
This move is in line with the broader market trends that have been observed in the last few days. There has been higher volatility, as Ethereum’s price tried to bounce back from the drop it experienced on Friday.
However, while analysts remain optimistic about the future of Ethereum, some have warned that a break below the $2,000 level could spell trouble for the current bull run. As of press time, it was still trading above key support levels, with a possible surge not fully ruled out.
Whale Activity Surges to Six-Week High
Contributing to the possibility of a rebound, on-chain data from Santiment reveals that large transactions on the Ethereum network have hit a 6-week high. Since the recent price drop, large holders, usually said to hold $100,000 or more have been accumulating Ether.
This indicates that they believe in the growth of its price in the future. This increase in whale activity happened at the same time as the Ethereum network experienced a record number of new wallets created.
On October 26, 6428 new wallets were created – the highest daily growth since September 5. This implies both current and potential market players are using the recent price decline to buy Ethereum at lower prices.
Nonetheless, large investors should note that current rise in the number of whales may not necessarily directly impact price. However, the accumulation trend shows that big investors are still confident even if the currency’s price has recently declined.
Concurrently, several technical analysts articulated bullish views on Ethereum with the expectation of a rebound in case the market structure maintains itself. A price analysis shared by TradingView user Basictradingtv paints a positive picture, with the analyst expecting it to jump to $4,000 in the medium term, a 60% increase.
This forecast is based on a premise that Ethereum shall fully retest previous bullish trends hence opening up a huge upside potential. However, the analysts believe that if Ether price moves under $2000, it will be deadly to the bullish structure.
Ethereum’s Future Hinges on Network Upgrades
Other than the price, Ethereum’s future remains affiliated with the ongoing development of Ethereum’s network, particularly the upcoming ‘Purge’.
Vitalik Buterin has shared the details of the purge. It is a critical upgrade to help cut down the data storage needs of the blockchain.
This upgrade should help with Ethereum’s increasing storage needs and should therefore improve the network’s scalability over time. Through a procedure of erasing data and removing history in network, the Purge will simplify the process of operating an Ethereum node to all the participants while preserving the security levels of the network.
Buterin also pointed out that there is a possibility of a ‘stateless’ model. It can further cut down the storage needs of Ethereum and therefore make the network sustainable for the future years.
While these network upgrades may not have an immediate impact on price, they are essential for maintaining Ethereum’s long-term scalability and attractiveness to developers and investors alike.
