Ethereum’s (ETH) breakthrough is approaching as supply drops, but demand lags behind

Ethereum breaks out of the triangle with a $3,700 target, but weak US demand and mixed on-chain signals could limit near-term upside potential.

Bollinger Bands are tightening on the ETH chart

On the 3-day chart, Ethereum is showing a narrow Bollinger Band squeeze. This setup indicates low volatility and is often followed by a larger move. At the time of writing, ETH is trading around $3,100 (per CoinGecko), with the price remaining close to the mid-range.

Analyst Bryant pointed to a similar setup that occurred during an earlier rally from $1,800 to $4,900. He was referring to a whale indicator that has activated one of the two required signals. According to them, the second signal is still inactive. The current structure indicates growing momentum, but no confirmed outbreak has yet occurred.

$ETH is about to explode upwards.

How?

• The Bollinger Bands are under heavy pressure, which means a BIG move is coming soon.

• The last time 2 of the 2 whale colors were enabled, $ETH rose from $1.8K to $4.9K.

Waiting for the doll.
(And the second whale color.) pic.twitter.com/i8lUtZdSVx

— Bryant (@TheSkayeth) January 8, 2026

Additionally, chartist Ali Martinez noted a breakout from a symmetrical triangle on the daily ETH chart. This type of formation reflects a tightening of prices over time. Ethereum moved above the upper trendline and is now trading slightly above the breakout point.

The expected target based on the height of the triangle is approximately $3,700. For this to remain valid, ETH must remain above the $3,100 to $3,300 zone. If the price falls back below the breakout level, the setup weakens. The base support of the triangle is around $2,800. Still, like CryptoPotato Previously reported, some analysts maintain long-term targets of $10,000 and above for Ethereum in this cycle.

Furthermore, market analyst Merlijn The Trader pointed out that Ethereum often performs well in the first and second quarters after finishing weak the previous year, citing similar trends in 2017, 2020 and 2023. Since the first quarter of 2026 was already green, he called this setup “positioning”, no coincidence, noting that volatility presents opportunities.

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Data from the chain shows weak US demand

Data from CryptoQuant shows that the Coinbase Premium Gap has fallen to its lowest point since early 2025. This metric compares ETH prices on Coinbase and Binance to reflect institutional interest from the United States. A negative gap indicates lower demand on Coinbase.

CryptoOnchain, an analyst at CryptoQuant, reported that the 14-day average of the premium is now minus 2,285. According to him, this decline indicates reduced participation from American buyers. With ETH struggling against the USD 3,300 resistance, the lack of institutional activity could dampen further gains.

Data on exchange rate reserves, on the other hand, tells a different story. Data from CryptoQuant also shows that ETH balances on exchanges have fallen below 16.5 million. This is one of the lowest figures in recent years. A lower supply on the stock exchanges reduces the direct selling pressure.