Tom Lee has issued a warning that Ethereum might be undervalued at the $3,000 mark. Nonetheless, the selling pressure from the group holding between 1k and 10k ETH continued. In an intriguing development, the availability on exchanges has been decreasing, indicating a possible accumulation trend. The Fusaka upgrade has advanced Ethereum into a new phase where daily transactions occur on Layer 2, while the base layer functions as the settlement layer. This could improve efficiency and increase data capacity, all while reducing network costs. Intelligent investors seem to trust that a long position will yield profits, but this does not guarantee that the subsequent action will align with that expectation.
The weekly chart shows that the swing structure (orange) is still in a bullish position. Within this optimistic context, the decline below $4.2k in September signaled a shift towards a negative outlook. The recent pullback to the $2.7k demand zone from May has highlighted the weakness of the bulls. During this period, the bulls have the ability to stage a resurgence. The RSI showed a downward trend as it dropped beneath the neutral 50 in October. The OBV, previously on the rise until September, began to drop sharply. Neither indicator indicated that immediate bullishness is forthcoming. However, the price action indicated a possible bullish reaction from the $2.5k-$2.7k demand zone. So far, we’ve seen an 18% change over the past three weeks.
The downward trend was also clear on the daily timeframe. However, the breakthrough beyond the prior local high indicated that the Ethereum internal structure was bullish on this timeframe. This fits seamlessly with the weekly swing structure and could indicate the start of the next upward trend. To the north, the supply zone (red box) presented a significant challenge. A possible strategy regarding this resistance might lead to a setback for ETH bulls. The OBV faced challenges in its attempts to increase over the last three weeks. The RSI had not yet been firmly moved past the neutral 50 line. The low volume seems to act as a warning sign suggesting a lack of demand.
Consequently, while the daily structure seems to indicate bullish sentiment, the 3.2k local support may still thwart any efforts by bulls to initiate a rally. Market sentiment continues to reflect a bearish and fearful outlook, as Bitcoin remains significantly below the crucial $100k psychological threshold. The lower timeframes, such as 4-hour and under, could offer favorable trade opportunities for bullish positions. On the 1-hour chart, the 3,014-3,086 area stands out as a short-term demand zone, which is poised to trigger a bullish move towards 3.4k.