Ethereum (ETH) bounces back after a period of losses for long-term holders. Accumulation signals are strengthening: is this a buying opportunity before a potential surge? Analysis of current dynamics.
Ethereum (ETH), the second-largest cryptocurrency by market capitalization, is going through a crucial phase. After an extended bearish pressure pushing the price to key support levels, indicators suggest a potential buying opportunity. With long-term holders in capitulation territory and emerging accumulation signals, let’s analyze if it’s the right time to position oneself on ETH.
Firstly, on-chain data indicates that long-term Ethereum holders have entered a capitulation phase, marked by increasing losses. The Long-Term Holder Net Unrealized Profit/Loss (LTH-NUPL) indicator has turned red, a rare occurrence often signaling the end of a bearish cycle.
This capitulation indicates that even the most patient investors are facing losses, creating an environment of “maximum pain” conducive to market reversals.
Simultaneously, the Market Value to Realized Value (MVRV) Long/Short Difference has dropped to -22%, a level historically associated with price floors. This signal suggests that ETH is undervalued compared to its realized value, offering an attractive entry point for savvy buyers.
Whale activity adds a layer of complexity. Over 530,000 ETH have changed hands between large holders in the past week, a volume that can signal strategic accumulation or redistribution. One striking example is that of an active whale since 2016, who recently sold 10,702 ETH at $1,576.
This sale, made during a significant correction, could aim to trigger panic among small holders, setting the stage for a recovery. And whales seem to be silently accumulating in recent weeks.
However, the increase in active addresses on the Ethereum network, despite price weakness, demonstrates sustained interest in the ecosystem. This resilience suggests that the fundamentals remain strong, even in the face of volatility.
Technically, ETH has been moving within a descending channel since November 2024, characterized by lower highs and lower lows. After a strong rebound from the $1,460 support, the price is now testing resistance around $1,815. A breakthrough of this level could shift the market structure to bullish, paving the way for a test of the upper channel resistance, near $2,000.
Conversely, a rejection at $1,815 could send ETH back towards the $1,460 support, extending the consolidation. Momentum indicators, such as the Relative Strength Index (RSI), show a emerging bullish divergence, indicating waning selling pressure. Increased volatility, anticipated by the Bollinger Bands, could soon clarify the direction.
Yet, the crypto market remains under the influence of Bitcoin, with its recent weakness weighing on altcoins like ETH. A Bitcoin recovery could catalyze a bullish movement for Ethereum. Moreover, Ethereum’s fundamentals remain a pillar of confidence. With its central role in decentralized finance (DeFi), NFTs, and decentralized applications (dApps), the network continues to attract developers and users.
The increasing adoption of layer 2 solutions, improving scalability and reducing fees, strengthens Ethereum’s position against competition. Upcoming upgrades, like Pectra in 2025, promise to further optimize the network’s performance, a factor that could appeal to institutional investors.
In the short term, Ethereum is in a high potential reversal zone. Holder capitulation, combined with MVRV signaling undervaluation and sustained network activity, creates a conducive environment for accumulation.
However, the $1,815 resistance remains a key obstacle. A clear breakout, supported by strong buying volume, could propel ETH towards $2,000 and beyond.
In case of persistent bearish market, ETH might head towards $1,100 or even lower to $890. A drop below $1,000 would present an opportunity unheard of a few weeks ago. So, is it the beginning of the end or the onset of a significant rebound for Ethereum?
For cautious investors, waiting for bullish confirmation above $1,815 can reduce risks. Long-term, Ethereum’s fundamentals and continuous adoption advocate for an upward trajectory, especially if the overall market regains a bullish momentum, turning a downturn into a rare long-term opportunity.
Here is a practical guide to buy ETH on this renowned platform known for its powerful tools and intuitive interface.
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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