beincrypto.com
Over the past few days, Ethereum’s ($ETH) price has oscillated within a narrow trading range. This mirrors the broader cryptocurrency market trend, which is in a consolidation phase.
However, a significant outflow of $ETH from cryptocurrency exchanges has ignited hopes for a potential rally towards the $4,000 mark. This analysis explains why this is likely in the near term.
Ethereum Exchange Outflows Touch Multi-Month Highs
On December 14, 108,521 $ETH worth above $418 million at current market prices were withdrawn from exchanges. According to Glassnode, this represented the highest number of $ETH removed from cryptocurrency exchanges in a single day since March 13.
This substantial outflow is bullish, suggesting investors are holding onto their $ETH rather than selling it. Reduced selling pressure often creates an environment where prices are more likely to rise. Hence, $ETH may break out of its narrow trading pattern if buying activity resurges.
Moreover, the coin’s Relative Strength Index (RSI) is at 60.22, indicating a steady demand for the leading altcoin. This indicator measures an asset’s overbought and oversold market conditions. Ranging from 0 to 100, values above 70 signify overbought conditions and potential price declines, while values below 30 indicate oversold conditions, suggesting a possible rebound.
At 60.22, $ETH’s RSI indicates that the altcoin is in a moderately bullish zone but not yet overbought. This suggests there is still room for further price appreciation before approaching overbought territory.
$ETH Price Prediction: Rally Above $4000 Within Reach
$ETH currently trades at $3,866, just below resistance at $4,069. If selling pressure weakens further, $ETH’s price may break above this resistance and attempt to reclaim its all-time high of $4,936, last reached in November 2021.
However, a rise in selling activity will invalidate this bullish projection. Should $ETH holders resume profit-taking, its price may drop to $3,388.