Ethereum price has risen in the past few days, helped by the ongoing exchange-traded funds (ETF) inflows and the recently announced US-Iran ceasefire. $ETH token was trading at $2,220 on Sunday, up by 30% from its lowest level this year.
Ethereum price is sending mixed signals
The three-day chart shows that Ethereum price is sending mixed signals this year. On the positive side, the coin has formed a large inverted head-and-shoulders pattern, which is a common bullish reversal sign in technical analysis. In this case, it is now in the right shoulder.
On the other hand, the coin has formed a bearish flag pattern, which is made up of a vertical line and an ascending channel. It has already completed the formation of the flagpole and is now in the ascending channel. In most cases, this pattern often leads to a strong sell-off.
Ethereum has dropped below all moving averages and is below the Supertrend indicator, a common bearish sign. Therefore, if the bearish flag works out, the pair will likely have a strong bearish breakdown, potentially to the year-to-date low of $1,750. A drop below that level will point to more downside, potentially to $1,500.
On the other hand, if the inverted head-and-shoulders pattern works out, the coin will likely rebound to the next key resistance level at $3,000.
$ETH price chart / Source: TradingView
Ethereum has some key bullish catalysts but risks remain
One key Ethereum catalyst is that American investors bought spot $ETH ETFs last week, a sign that they have started to accumulate the token. Spot $ETH ETFs added over $187 million in inflows last week after shedding assets in the previous three weeks. These funds now hold nearly $12.96 billion in assets.
Meanwhile, Tom Lee has continued to accumulate the token. BitMine, his firm, now holds over 4.8 million in Ethereum tokens, which are now worth over $10.6 billion. It now plans to continue accumulating the token as it seeks to achieve its 6 million tokens.
This accumulation has led to a big drop in the supply of supply in exchanges. The supply has dropped to 12.10 million, down from over 17.85 million. Falling exchange supply is a sign that investors are continuing to buy the token.
More data shows that the network’s stablecoin supply has jumped to $176 billion, while the transaction volume jumped to over $1.01 trillion. Its stablecoin addresses have jumped to over 6.3 million, a figure that may continue.
The main short-term risk that Ethereum faces is that the peace talks between the US and Iran have largely failed, which may lead to high volatility in the market if the war resumes.
The other main challenge is the ongoing Hyperliquid growth, which has seen it process more transaction volume than all DEX platforms on Ethereum.
