Ethereum Breaks 17-Month Stalemate – Analysts Predict $3.6K Next!

Ethereum [ETH]

Ethereum's price movement has been stagnant for over a year, showing minimal returns. However, recent trends and analytical insights suggest a potential breakout, with predictions indicating a rise to around $3.6K.

Key Takeaways:

Ethereum (ETH) has experienced a modest gain of approximately 39% over the past 17 months.
Analysts are noticing a bullish divergence in ETH’s price structure, indicating a potential rally.
On-chain metrics show a decrease in the number of ETH deposited to exchanges, suggesting more investors are holding onto their assets.
Ethereum's decentralized finance (DeFi) ecosystem remains stable, with a total value locked (TVL) showing resilience in capital inflows.

A Developing Divergence

For much of the past year, Ethereum's price action has tested the patience of investors. As the native asset of the second-largest cryptocurrency by market capitalization, ETH has primarily drifted sideways, resulting in lackluster returns and little sustained bullish momentum.

From August 2024 to now—about 17 months—ETH's value has risen roughly 39%. This translates to an average monthly gain of 2.29%, which is modest compared to typical crypto market standards. However, positive sentiment appears to be growing, and initial signs indicate Ethereum may be on the verge of a stronger upward movement.

In a recent technical analysis, Swissblock analyst Henrik Zeberg pointed out a developing divergence in Ethereum’s price structure, which may create the conditions for a larger price rally. This observation followed a popular post showing that Bitfinex whales—investors with significant funds—had taken substantial long positions in ETH, reflecting rising confidence at higher price levels.

Reacting to this information, Zeberg remarked: “Wait for it……! ETH will SOAR!”

ETH Long price chart.
Source: TradingView

The accompanying chart illustrated that ETH was trading within a descending consolidation channel, while its Relative Strength Index (RSI) was trending upward along an ascending support line on the weekly timeframe. This divergence indicated diminishing downward pressure amidst subdued price action. Historically, similar patterns have frequently led to price recoveries. ETH has already taken an initial step by breaking above resistance levels within the descending channel. If the momentum persists, a sustained upward movement could follow.

Supporting Data from Exchanges

Beyond technical indicators, metrics from on-chain exchanges suggest that the economic dynamics surrounding Ethereum are shifting in favor of accumulation.

The number of Exchange-Depositing Addresses—a metric that tracks wallets sending ETH to exchanges—has significantly dropped, signaling that fewer holders are looking to sell. This decline reduces immediate selling pressure. The metric, at the time of this article, was close to 18 million, a notable decrease from prior levels. This trend implies that more investors are choosing to hold onto their ETH instead of sending it to exchanges.

Ethereum Exchange supply ratio.
Source: CryptoQuant

Concurrently, Ethereum’s Exchange Supply Ratio has continued to decline. As of the latest update, it was at 0.137, indicating a gradual reduction in ETH reserves held on trading platforms. Typically, lower Exchange Reserves correlate with decreased selling liquidity, a scenario that can bolster price stability during periods of increasing demand. The tightening availability of ETH on exchanges could thus remain a driving force for upward price momentum.

Stability in DeFi Activity

Additionally, Ethereum's decentralized finance (DeFi) ecosystem provides a supportive landscape. DeFi activity has remained stable, suggesting that capital is not exiting the network despite recent market fluctuations.

The total value locked (TVL) in DeFi has maintained a consistent range since November. After a significant market pullback that brought it down to $64.66 billion, Ethereum’s TVL has rebounded to approximately $69.95 billion, according to DeFiLlama.

TVL measures the amount of capital locked within DeFi protocols and serves as a broad indicator of network health. The $5.29 billion increase during this period points to ongoing inflows and sustained user engagement. Although the recovery has been gradual rather than explosive, it reflects resilience. If capital inflows continue at this pace, they could further reinforce market confidence and improve Ethereum's outlook.

Final Thoughts

In conclusion, while Ethereum has faced a testing year, various indicators—including both technical analysis and on-chain metrics—suggest it may be on the brink of a significant upward movement. As more investors hold onto their ETH and DeFi activity remains steady, the future appears optimistic for Ethereum enthusiasts.