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- Ethereum historically correlates strongly with Bitcoin’s price movements.
- Investor confidence in ETH grows as it sustains levels above $2,700.
- Multiple on-chain metrics indicate potential for an ETH breakout rally.
Ethereum has shown a strong historical price correlation with Bitcoin. As BTC recently cleared the pivotal $51,000 level, hopes have emerged around Ethereum progressing towards the $3,000 milestone. Multiple on-chain metrics and derivatives market activity point to a potential ETH breakout rally.
Investor Confidence and Ethereum Accumulation Grows
After slipping below $2,600 amidst some CPI induced Bitcoin consolidation around $50k, Ethereum has found support above $2,700. The crypto market reversal after the CPI print has fueled over $130 million in liquidations in 12 hours, predominantly from short positions.
As ETH sustains levels above $2,700, investor accumulation has spiked dramatically. Data from IntoTheBlock shows the Ethereum Netflow metric has dropped to -69.95k ETH. This suggests that ETH inflows to exchanges are lagging outflows to wallets for holding by a significant margin – underscoring rising confidence.
Moreover, the race to launch a US Ethereum ETF is expanding, with Franklin Templeton the latest to file for an SEC approved spot ETH ETF. Such developments appear tailor-made to sustain Ethereum accumulation.
Major Milestones Loom on Route to $3,000
After strong defense by bulls near the $2,700 Fib level, Ethereum surged exponentially to $2,773 before witnessing some selling pressure. ETH currently trades at $2,748, up over 5% in a day.
While the 20-day EMA at $2,619 and an RSI in overbought territory signal potential for a minor pullback, holding $2,700 could propel prices towards the coveted $3k mark.
On the flip side, the recent breakout level of $2,400 represents initial crucial support. However, a dip below that could intensify selling and expose the $2,150 demand zone next.