Ethereum Price Rally to $5,000 Imminent As Exchange Reserves Shrink

The cryptocurrency market is poised to end the third week of July on a bullish note. Bitcoin reached a peak of $67,466 on Friday, marking a 15% weekly surge, while Ethereum price surged to a high of $3,540, achieving a 13.7% rise over the week. Looking ahead, Ethereum will capture significant investor attention as five spot Ethereum exchange-traded funds (ETFs) are slated to commence trading on the Chicago Board Options Exchange on July 23.

Ethereum Price Poised for a Breakout with Upcoming ETFs Launch

Ethereum, the second-largest cryptocurrency by market cap showcased a remarkable recovery in the past two weeks. The bullish turnaround has boasted the assist from $2811 to $3481 registering a growth of 23.8% while the market cap surged to $419.2 Billion.

The recent price jump above daily EMAs (20, 50, 100, and 200) accentuates a positive shift in market sentiment. Moreover, the 4-hour chart revealed the V-shaped recovery daily as the inverted head and shoulder formation. 

This bullish reversal chart pattern signals a bottom formation and potential for a new breakout opportunity for traders.

Moreover, the Ethereum transition to Proof-of-Stake (PoS) has catalyzed a significant decline in ETH exchange reserves, as highlighted by on-chain analyst elcryptotavo. Since the PoS implementation, Ethereum holders have increasingly opted to stake their ETH, reducing exchange liquidity.

#Ethereum ticking bomb

#Ethereum reserves on exchanges have been dropping since the move to Proof-of-Stake (PoS) and the approval of the #ETH ETF has only accelerated this trend.

How much more will the ETF impact the reserves? #Crypto #Blockchain #ETHNews… pic.twitter.com/sj4m6eV4lD

— EL CRYPTO TAVO (@elcryptotavo) July 18, 2024

The approval of the Ethereum ETF has further intensified this trend by providing a new investment vehicle for institutional and retail investors. This scarcity effect is expected to drive up Ethereum prices as supply constraints become more pronounced.

Furthermore, the Chicago Board Options Exchange (Cboe) has officially announced that five Ethereum spot ETFs, managed by VanEck, Invesco, Fidelity, 21Shares, and Franklin Templeton, are set to begin trading on July 23.

Thus, the Ethereum price forecast hints potential breach of the overhead neckline at $3550 and a 9% rise before challenging Flag pattern resistance.

The Ether coin has developed this continuation pattern amid the past 4 months of consolidation. The pattern’s two parallel trendlines as major resistance and support allow buyers to recuperate the exhausted bullish.

The Relative Strength Index indicator at 59% indicates a positive trend for ETH’s future and the potential of entering a high momentum.

A potential breakout from flag resistance will better signal the uptrend continuation and bolster buyers to chase the $5500 target.

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