Ethereum, like most altcoins, is under heavy selling pressure and is struggling to shake off the weakness it suffered in early August. Despite flashes of strength after the August 5 sell-off, prices remain below $2,800.
The only positive thing at the moment, at least looking at the daily chart, is the impressive resilience of the bulls. Despite the wave of lower declines, buyers have absorbed the flood of selling pressure, keeping prices above the $2,500 level.
However, the bearish pattern is still in place, but one analyst believes that a rejection of the low prices below $2,500 is crucial.
Ethereum bulls must keep prices above $2,500
In a post on X, the analyst said, He said Bulls must keep Ethereum price above $2,500 for the uptrend to continue. The round number, looking at the price development on the daily chart, indicates the bull flag rule.
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In the past few trading days since the August 8 rally, Ethereum has been trending below the $2,700 and $2,800 resistance areas. Meanwhile, support remains clear at $2,500. As the price action consolidates, a bullish flag has formed, indicating strength.
According to the analyst, if buyers hold $2,500 as their anchor, Ethereum is set to rally, reaching $3,150 in the next session. The recovery is welcome, considering that the August 1-5 sell-off was a bearish pattern. This sell-off broke through critical support areas from April to July 2024.
The Impact of Spot ETFs and Ecosystem Growth
The analyst added that the rally is likely to be driven by inflows into Ethereum spot ETFs. Since the approval of spot ETFs in July, institutions have been eager to find exposure.
Go to X, an ETF analyst Notes Inflows are now over $2 billion, excluding outflows from Grayscale’s ETHE. During this period, BlackRock’s iShares Ethereum ETF has been the driver of demand.
Behind the Inflows from Ethereum Spot ETFs, Vitalik Buterin He believes There has been positive progress that could support prices. These include lower gas fees on the mainnet and via layer 2 solutions like Base.
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Furthermore, the co-founder pointed out that the decentralization efforts of Arbitrum and Optimism are tremendous. Arbitrum and Optimism recently announced their bug-free system. However, Optimism has reverted to a bug-free centralized system after an audit report, which allowed for the bugs to be fixed.
Featured image of DALLE, chart from TradingView
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