Here’s Why ETH Price Could Kick Off This Week On A Bullish Leg

Key Insights:

• ETH price shows signs of cooling sell pressure as it approaches the RSI mid-level.
• Ethereum whale executes large long position as price approaching bottom zone of its 4-week range.
• Assessing risks of extended downside amid heightened geopolitical tensions and disrupted investor confidence.

ETH price is right back where it started off last week after kicking off the week on a bullish leg, only for a mid-week retracement to undo its previous gains. The cryptocurrency surged as high as $2,880 last week but has since cooled down by almost 12% to its $2522 press time.

But will ETH price action continue its downward trend this week or is another bullish attempt in the making? The bearish momentum that prevailed in the second half of the week appeared to be cooling down. This was particularly evident in its spot flows.

For context, ETH spot outflows surged above $262 million on Friday. Outflows have since cooled down to $13.5 million in the last 24 hours.

The declining spot outflows were also accompanied by similar observations in as far as exchange flows were concerned.  Ethereum exchange inflows and outflows cooled down drastically during the weekend.

Bulls attempt take-over at key ETH price level

In fact, exchange outflows slightly outpaced inflows signaling that demand was attempting a comeback after the recent dip. The timing of this outcome was also noteworthy considering that price recently tanked to the RSI’s 50% level where it was likely to bounce back.

Aside from the potential pivot at the 50% RSI level, ETH price action has been moving within a narrow range in the last 4 weeks. Its recent pullback resulted in a retest of the lower range.

The above observations pointed towards the rising possibility that ETH could kick off the week with another bullish bounce. Interestingly, recent on-chain data backed the idea that demand was making a comeback.

On-chain analysis revealed that one whale transferred 8,500 ETH worth about $21.5 million from Bitget exchange to a private wallet. However, this was one of the few isolated events highlighting robust network activity.

In addition, the large whale purchase could signal that investors were buying the dip. Liquidations in the derivatives segment also cooled down especially after Friday’s massive shakedown. This outcome could potentially set the cryptocurrency up for an interesting week ahead.

Assessing risks of sustained downside

While ETH could be on the verge of another recovery rally this week, the possibility of that happening depends on various factors. Among them is the recent geopolitical tensions coming out of the Middle-East which has been threatening investor confidence.

The same geopolitical factors may have influenced the cool down last week and could continue to dampen market sentiment as long as they remain active. Ethereum weekly price action has been ranging for the last 5 weeks, signaling lack of directional confidence.

The ranging performance suggests that ETH price could potentially experience a massive directional spike once it picks a side. This could result in either a strong bullish move with the prospects of price pushing above $3,000, or a massive pullback that may push price towards the $2,000 level.

Unfortunately, the geopolitical factors are highly unpredictable, but President Trump express interest in bringing peace between the two sides. If this happens, then the markets could potentially gear up for a strong comeback and the opposite is also true, in the event of further escalation.

As far as sentiment was concerned, Ethereum slid into fear territory on Saturday during which it dropped to 37. This marked the first time in weeks that the sentiment shifted after a sustained lengthy period in greed.

Ethereum sentiment also recovered slightly in the last 24 hours, during which it pushed into neutral sentiment. This outcome signaled that investors were expecting further recovery. However, it is worth noting that sentiment could still decline further depending on both internal and external market factors.

The post Here’s Why ETH Price Could Kick Off This Week On A Bullish Leg appeared first on The Coin Republic.