Is the Ethereum token a bullish reversal after the recent 40% decline?
TLDR
The Ethereum RSI prints higher lows while the price shows lower lows, creating a classic bullish divergence.
Whales has accumulated $660 million worth of 220,000 ETH despite an earlier selloff last week.
Spot Ethereum ETFs recorded $84 million in inflows on December 22, indicating a return to institutional interest.
A break above the $3,100 resistance could trigger a rally towards the $5,000 target and previous highs.
Ethereum has faced a critical moment after falling 40% since August, with the current price hovering around $2,900.
Technical analysts identify new bullish signals that may signal the end of the downward trend. Market participants argue that recent patterns and institutional moves confirm a true reversal or represent a temporary advance.
Are Technical Indicators Confirming a Trend Reversal?
A high divergence pattern appears on Ethereum's daily chart, raising questions about a potential upside.
Price action prints lower lows while the relative strength index shows higher lows. This divergence often precedes significant rallies when historical patterns hold true.
Altcoin Buzz suggests that the last similar setup resulted in a 27% price increase. The analysis shows that ETH can reach $3,100 as the next resistance level.
Breaking this barrier could revive discussions of the $5,000 price objective that has dominated previous market cycles.
Technical analyst JAVONMARKS It differs a A hidden bullish divergence comparable to the 2023 formation.
The setup suggests that Ethereum could challenge its all-time high around $4,954 if conditions agree. A move beyond that level opens the door to $8,500, although such projections are dependent on sustained momentum and market conditions.
Does institutional activism support the reversal thesis?
Spot Ethereum ETFs attracted $84 million in revenue on December 22, indicating a possible shift in sentiment.
This is in contrast to previous weeks which saw a steady flow of institutional yields. James Easton has similar buying patterns to previous ETH rally from $1,300 to $4,950.
Big wallet holders accumulated 220,000 ETH last week, worth about $660 million. Ali Charts reported this buying spree following a $360 million selloff the week before.
The reversal in whale behavior raises questions about whether smart money is waiting for higher prices or simply taking advantage of the declining levels.
The convergence of institutional flows and whale stocks presents a compelling scenario for bulls. However, skeptics note that short-term buying activity does not guarantee a sustained upward push.
The market is now looking to see if Ethereum can regain the $3,100 resistance level to confirm these early reversal signs.
Price action at current levels indicates continued uncertainty between bears defending lows and bulls trying to establish support.
Technical patterns and accumulation data support reversible status. However, confirmation requires Ethereum to break key resistance zones and stay above critical levels in the coming sessions.
