As 2024 draws to a close, Ethereum (ETH) continues to hold its position as the second-largest cryptocurrency. The market sentiment has shifted from bearish to bullish, reflecting a significant change in investor outlook. Interestingly, Ethereum’s price action is mirroring its 2019 pattern on the ETH/USD pair, where an ascending wedge formation is evident. This pattern is characterized by higher lows, which in this cycle are ten times larger than those observed in 2019.
In 2019, Ethereum’s price fell below its ascending wedge just before the first Federal Reserve rate cut. This scenario is eerily similar to the current situation in 2024. After the rate cut in 2019, both ETH/USD and ETH/BTC bottomed out, forming a strong confluence. The expectation is that the current pattern will replicate this success, with the price likely to break below the wedge, capture liquidity, and then reverse to the upside in late Q4 2024 or early Q1 2025. However, if the price remains below the ascending wedge for an extended period, further analysis may be necessary to adjust strategies or minimize potential losses.
Whale Accumulation: A Key Driver
Whales, or the largest holders of Ethereum, have been steadily accumulating more ETH since 2019. This trend intensified after the Shanghai upgrade in early 2023. As of now, whales control over 43% of Ethereum’s circulating supply, closing in on the 48% held by retail investors. This significant accumulation indicates that these major players expect Ethereum’s price to move higher over time.
The role of whales in supporting the expected upward movement of Ethereum cannot be overstated. Their steady accumulation of ETH suggests a strong belief in the long-term potential of the cryptocurrency. This behavior is a positive signal for the market, as it indicates confidence among the largest holders in Ethereum’s future price growth.
Exchange Netflows: A Sign of Reduced Selling Pressure
Analyzing Ethereum’s exchange netflows reveals that the negative netflow on derivative exchanges has surpassed 40,000 ETH. This suggests that more ETH is being withdrawn from these exchanges and transferred to cold wallets, indicating reduced selling pressure. Traders may be preparing for long-term gains, suggesting that the current decline in Ethereum’s price is a temporary correction, potentially setting the stage for a significant upward movement.
The movement of ETH from exchanges to cold wallets is a critical indicator of market sentiment. It shows that traders are less inclined to sell their holdings in the short term, which can reduce downward pressure on the price. This behavior aligns with the broader market sentiment shift from bearish to bullish as 2024 progresses.
Ethereum ETFs: A Mixed Bag
Despite some negative net-flows in Ethereum ETFs, there are positive signs. ETH ETFs, including those from Fidelity, have seen inflows over the past 24 hours, while Grayscale’s ETHE experienced the largest and only outflow. The overall positive sentiment surrounding ETFs may eventually support Ethereum’s future price growth.
The performance of Ethereum ETFs is a crucial factor to watch. While some ETFs have experienced outflows, the inflows into others suggest that there is still strong interest in Ethereum as an investment. This mixed performance could stabilize and potentially boost Ethereum’s price in the future, especially if the overall market sentiment remains positive.
Conclusion
In conclusion, Ethereum’s current price action, whale accumulation, exchange netflows, and ETF performance all point towards a potentially bullish future. The mirroring of the 2019 pattern suggests that Ethereum could see significant price movements in the coming months. The steady accumulation by whales and the reduced selling pressure indicated by exchange netflows further support this outlook. While the performance of Ethereum ETFs presents a mixed picture, the overall sentiment remains positive, suggesting that Ethereum could see substantial growth as we move into 2025.
