Ethereum had a solidly bullish August. The monthly low and high were at $1,820 and $2,567, respectively, reflecting a 41% rally. The consistent increases were accompanied by a series of favourable inflows into Spot Ethereum ETFs. Since the 12th of August, Farside Investors’ data indicated a net inflow of $1.736 billion into spot ETFs. With the exception of September 2nd, every trading day has recorded inflows. Yet, the bullish momentum surrounding Ethereum has encountered a standstill in recent weeks. The 4-hour chart above illustrates a range formation (purple) between $2,380 and $2,530.
Moreover, the swing high at $2,466 from April, which marked a lower high in the long-term downtrend from last October, is within this range. In other words, there is a possibility that ETH is encountering distribution at a crucial swing level. The volume indicators on the 4-hour timeframe do not indicate consistent selling; however, there exists a degree of uncertainty among investors. The 3-month taker CVD indicated a rise in aggressive buying volume during August. Currently, the Spot taker CVD indicates a prevailing dominance of taker buying, suggesting significant buying pressure in the market.
The derivatives markets experienced an increase in buying pressure. The taker buy/sell ratio increased to 1.11. Readings exceeding 1 indicate that aggressive buy orders have surpassed those of sellers, signalling a prevailing dominance of buyers. If the ratio remains above 1 in the coming days, it will indicate elevated, sustained buying pressure. This could assist in propelling Ethereum prices past the crucial $2.5k resistance threshold. In recent days, there has been a noticeable decline in the ETH reserve on exchanges. Popular crypto analyst Ali Martinez highlighted in a post on X that 116,000 ETH, valued at approximately $300 million, has been withdrawn from exchanges over the last two days.
Aggressive accumulation and the dominance of spot and derivatives taker buyers indicate a strong bullish sentiment in the market. It appeared inevitable that the $2,530 range high would be surpassed. In that scenario, the next long-term resistance to monitor would be the $2,900-$3,000 supply zone. Meanwhile, a breakdown below $2,380 would serve as the initial significant indicator that conditions were beginning to shift unfavourably for the ETH bulls.
