Ethereum (ETH) has shown notable resilience, maintaining its price above $3,100 despite facing technical resistance and weakness relative to Bitcoin.
Recent developments in exchange reserves and price action suggest potential for a price squeeze, but mixed technical signals add uncertainty to the near-term outlook.
Exchange Reserves at Multi-Year Lows
ETH exchange reserves have reached multi-year lows, continuing a trend of large-scale withdrawals from exchanges that started in late 2021.
This decrease suggests a shift toward long-term storage by holders, potentially creating a supply shortage that could push prices higher in the future.
Historically, a reduction in reserves has been linked to price stabilization at higher levels.
Technical Analysis: Mixed Signals
Resistance Levels: Ethereum recently faced resistance near $3,220 following a recovery from a low of $3,021. Immediate resistance remains around $3,150, with a significant barrier at $3,220.
Bearish Trend Line: ETH is trading below both $3,200 and the 100-hourly Simple Moving Average, forming a bearish trend line with resistance at $3,250. To establish a bullish trend, ETH would need to break above $3,270, which could open the door to $3,350 or even $3,500.
Support Levels: On the downside, initial support lies near $3,050, with stronger support around $3,020. A break below these levels could push ETH further toward $3,000 or $2,950.
ETH/BTC Pair Shows Weakness
Ethereum’s performance relative to Bitcoin is concerning, with the ETH/BTC pair showing lower lows, indicating weakness against Bitcoin.
The next support range for this pair is between 0.028 and 0.026. A bounce at these levels could reignite interest in Ethereum.
Market Outlook: Potential for Upside Despite Weakness
Despite the short-term technical weakness, Ethereum’s strong fundamentals, including the ongoing exchange withdrawals and reduced reserves, suggest that ETH may be undervalued.
If these supply-side factors continue, ETH could see upward pressure once demand picks up. However, it will need to overcome key resistance levels before a sustained rally can occur.
In conclusion, while Ethereum faces immediate technical resistance and short-term bearish signals, the declining exchange reserves and potential supply squeeze could provide a foundation for future price appreciation.
Ethereum’s next move will depend on whether it can break through resistance or if it will face further consolidation.
