TLDR:
- Ethereum’s RSI prints higher lows while the price shows lower lows, creating a classic bullish divergence.
- Whales collected 220,000 ETH worth $660 million last week, despite previous sell-off activity.
- Spot Ethereum ETFs recorded inflows of $84 million on December 22, signaling institutional yield returns.
- Breaking resistance above $3,100 could trigger a rally towards the $5,000 target and previous all-time highs.
Ethereum represents a critical moment after a 40% drop since August, with current prices hovering around $2,900.
Technical analysts identify emerging bullish signals that could mark the end of the downtrend. Market participants are debating whether recent patterns and institutional activity confirm a real turnaround or represent a temporary rebound.
Do technical indicators confirm a trend reversal?
A bullish divergence pattern appears on Ethereum’s daily chart, raising questions about its potential upside momentum.
The Relative Strength Index shows higher lows, while price action produces lower lows. This divergence often precedes significant rallies when historical patterns hold true.
Altcoin Buzz points out that the last similar setup resulted in a 27% price increase. The analysis suggests that ETH could target $3,100 as the next resistance level.
Breaking this barrier could revive discussions about the $5,000 price target that has dominated previous market cycles.
Technical analyst JAVONMARKS identifies one Hidden Bull Divergence similar to the 2023 formation.
The setup suggests that Ethereum could challenge its all-time high near $4,954 if conditions match. A move beyond that level potentially opens the door to $8,500, although such projections are dependent on continued momentum and market conditions.
Does institutional activity support the reversal thesis?
Discover Ethereum ETFs attracted $84 million in inflows on December 22, marking a possible shift in sentiment.
This contrasts with previous weeks, when institutional products saw a steady outflow. James Easton draws parallels to previous buying patterns that preceded ETH’s rally from $1,300 to $4,950.
Major wallet holders have amassed 220,000 ETH worth approximately $660 million in the past week. Ali Charts reports that this buying spree follows a $360 million sell-off the week before.
The turnaround in whale behavior raises questions about whether smart money expects higher prices or simply benefits from reduced levels.
The convergence of institutional inflows and whale accumulation makes a compelling case for bulls. However, skeptics note that the short-term buying activity does not guarantee sustained upside momentum.
The market is now watching to see if Ethereum can reclaim the $3,100 resistance level to validate these early reversal signals.
Price promotion on the current level reflects the current situation uncertainty between bears defending lower prices and bulls trying to gain support.
Technical patterns and accumulation data argue for a potential reversal scenario. But confirmation requires Ethereum to break key resistance zones and maintain momentum above critical thresholds in the coming sessions.
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