- Ethereum registered losses of 2.70% over the last 24 hours
- As investors turn to buy the dip, Ethereum must reclaim $2,350 for a potential rally
Over the last two weeks, Ethereum [ETH] has seen some extreme volatility on the charts. Over this period, ETH’s price has climbed to a local high of $2.7k. On the contrary, the period has also seen the altcoin drop below $2,000 for the first time since November 2023.
The latest price fluctuation has left key stakeholders sharing different opinions, with some still optimistic about ETH. One of them is Ali Martinez, with the crypto analyst hinting at a potential rally to $3,260 citing pricing bands and the MVRV.
Can Ethereum rally to $3,260 on the charts?
In his analysis, Martinez observed that the prevailing market conditions have left $2,350 as the most significant resistance level for the altcoin.
Source: X
Therefore, if ETH breaks out of this level and moves above it, it could trigger significant buying momentum and attempt the next significant level around $3260. Reclaiming this level could have a psychological effect by confirming a bullish trend shift. This would entice investors to buy the altcoin and take long positions.
According to Martinez, with Ethereum’s prices dropping below its MVRV, it has created a perfect buying opportunity. Historically, buying at this levels has usually provided the most returns – A trend that has persisted since 2016.
Source: CryptoQuant
Thanks to this decline, it would seem investors have turned to buying the dip.
This buying activity can be evidenced by Ethereum’s Exchange netflows which have remained negative over the last 4 days. A negative netflow means buyers are dominating the market, with more exchange outflows than inflows.
Source: IntoTheBlock
Looking at whale activity, this buying activity is more prevalent among whales. According to IntoTheBlock, Ethereum whales are back in the market having accumulated over 932.79k ETH tokens over the past day.
Equally, large holders’ netflows spiked to 474.89k. This suggested that there have been more capital inflows from whales than outflows. When whales turn to accumulation, it alludes to strong bullish sentiments as they anticipate the price to rebound. This would make the dip a perfect buying opportunity.
Source: CryptoQuant
This bullishness can be further confirmed by the rising funding rate, with the same climbing to a weekly high of 0.01.
When the funding rate rises, it implies that traders are paying funding fees to hold their long positions. Since this uptick is backed by increased accumulation, it supported a potential price rally.
What next for ETH’s price action?
In conclusion, Ethereum’s buyers have entered the market – Both whales and retailers. With sellers seeming exhausted, ETH may be well-positioned for recovery. If the demand witnessed over the past day holds, we could see ETH reclaim $2,325 and attempt a rally towards $2.7k.
However, if the move by bulls fails, we could see the altcoin continue trading between $2,114 and $2,300. To hit the levels predicted by Martinez, it has to first reclaim $2.7k and $3k – Unlikely in the short term unless macroeconomic data turns favorable.
