As Bitcoin is gaining momentum again ahead of the halving event, the market is facing accumulation by whale investors. As a result, Ethereum has triggered a notable surge as the buying demand has resumed. Interestingly, several on-chain indicators of ETH have now turned bullish and are defending the ongoing correction on the price chart, aiming to push the ETH price towards the resistance channel.
Ethereum’s Net Flows Defend Price Correction
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After BTC price rose to $72,000, Ethereum price immediately broke through $37,000, leading to large-scale short liquidation. However, since the Dencun upgrade in mid-March, Ethereum price has been struggling to recover to the $4,000 mark and has faced a sharp sell-off.
However, with the Bitcoin halving event approaching in less than 10 days, Ethereum traders’ leverage usage has risen significantly. On April 8, the price of Ethereum rose 7%, and the leverage ratio rose to 0.29%, the highest level in nearly 45 trading days since February 25. The surge in leverage during the upward trend shows that traders are increasingly borrowing to strengthen their financial strength. Positions, betting on the continued rise of Ethereum.
Ethereum (ETH) has seen a significant price drop over the past few hours. Coinglass reports that nearly $21 million worth of longs were liquidated in the past four hours alone. Despite the drop, there has been a clear increase in accumulation by holders as data from IntoTheBlock shows that the Netflow metric fell into negative territory, reaching -17.75K ETH. This suggests that more ETH is being withdrawn from exchanges than deposited, especially after the ETH price surged above $3,600.
This behavior is somewhat unusual during price surges, as holders typically deposit more ETH when intending to sell, rather than withdrawing. However, this could reinforce support levels for ETH prices, making it difficult for sellers to slash prices significantly.
Where will ETH price go next?
The bulls have failed to sustain the price above $3,700 as sellers strongly defended this resistance and dropped the price below the immediate Fibonacci channel. ETH price is currently declining sharply with the goal of retesting the $3,400 level. As of the time of writing, ETH price is $3,506, down more than 3.4% in the past 24 hours.
The ETH/USDT pair has fallen below the critical $3,500 mark and deserves a close watch. If the sellers succeed in keeping the price below this mark, the pair could gain bearish momentum with the potential for a rally to $3,200-3,300. However, as a rebound above the EMA trendline could lead to a retest of $3,700, expectations of a bullish return to this level remain.
If ETH price successfully breaks above $3,700, it will trigger increased buying power, leading to a jump to $4,000. A successful consolidation could boost confidence, leading to a further surge in ETH price to $4,500.
