Ethereum (ETH) has been on a downward trajectory, with its price dipping significantly in recent weeks. However, a potential bullish reversal may be on the horizon, as Ethereum’s price chart reveals a double-bottom pattern near key support levels.
This technical indicator, coupled with a rebound in whale transactions and active addresses, suggests that Ethereum might be poised for a recovery.
Ethereum’s Price Struggles Continue
Over the past month, Ethereum faced considerable challenges, with its price declining. Just yesterday, ETH saw a 4.5% drop, bringing its trading price to $2,399. Although it recovered slightly in the last 24 hours to around $2,443, the asset remained down by 3.55% over the weekly chart.
Such a persisting bearish trend has raised concern among many investors. However, some market analysts expect a change in trend soon. One such analyst, Mags, provided thoughts on X (previously Twitter) and noted that Ethereum is in a large triangle.
Mags said that ETH could form a double bottom near the upward-sloping trendline support, a bullish reversal pattern. In technical analysis, a double-bottom pattern is considered bullish and suggests that the asset’s price is near the bottom and may rise in the near term.
If this is the case for Ethereum, it could indicate that the current price downtrend will be reversed, and a new rally may follow. Currently, Ethereum has approached the near crucial support levels and is expected to reverse.
Whale Transactions and Active Addresses Show Positive Signs
Despite the recent price declines, Ethereum’s underlying fundamentals are beginning to show signs of recovery. Data from IntoTheBlock reveals that whale transactions—those exceeding $100,000—have rebounded after a sharp decline earlier in August.
On August 5, these transactions peaked at over 16.99K but dropped to approximately 2,62K by August 10. More recent data shows a recovery, with whale transactions rising to 5.61K at press time.
The increase in whale transactions is a positive sign, indicating that large investors might be positioning themselves for a potential price recovery.
ETH Large Transactions (Source: IntoTheBlock)
Whale activity is often considered a precursor to broader market movements, reflecting renewed interest from deep-pocketed investors. In addition to whale transactions, the number of active Ethereum addresses has also begun to recover.
After peaking at 638.83K on August 14, active addresses fell below 400,000 last week.
ETH Active Addresses (Source: IntoTheBlock)
However, this metric has since rebounded to 450.6K. A rise in active addresses typically indicates growing user activity on the network, which could contribute to an upward price movement.
Potential Scenarios for Ethereum’s Price
If the double bottom pattern holds, Ethereum’s price could rise to its immediate high at $2,592. A breach of this level may push ETH toward retesting the $2.8K resistance, which previously served as strong support.
Source: TradingView
On the downside, if bearish pressure continues and the double bottom is broken, Ethereum could fall to $2,132, a level last seen on August 5. A break below this could lead to further declines, with the price hovering around the $2K mark.
This scenario remains speculative, but the emerging patterns and indicators suggest that Ethereum’s price action is at a critical juncture. Investors and traders should monitor these developments closely as Ethereum approaches key price levels.
