Of course, the cryptocurrency market is currently abuzz with speculation on Ethereum possibly hitting $7,000. It’s no wonder analysts are drawing such close parallels between current market conditions and the market’s powerful 2020 upside breakout. They hope a similar wave could be coming just over the horizon. On-chain bullishness This optimism is largely based on technical analysis, whale accumulation patterns and increasing interest from institutional players. Here are the four key pieces underlying this very bullish view.

Technical Indicators Pointing Upward

Technical analysis can offer helpful hints about where prices might go next. At present, the overall technical analysis for Ethereum shows a “buy” signal. This rating takes into account a wide array of indicators that span the full range from moving averages to oscillators.

Moving Averages (MA) are primarily used types of Simple Moving Averages (SMA) and Exponential Moving Averages (EMA). These are rough averages over various timeframes—from 10 to 200 days, 10-day increments. It takes into account the Ichimoku Cloud, VWMA (Volume Weighted Moving Average), and HullMA. Technicians like to check oscillators, with one of the most important signals being the Relative Strength Index (RSI) and Stochastic Oscillator. In addition, they look at Commodity Channel Index (CCI), Average Directional Index (ADX), Awesome Oscillator (AO), Momentum, Moving Average Convergence Divergence (MACD), Stochastic RSI, Williams %R, Bulls and Bears Power, Ultimate Oscillator (UO). Volatility is an important factor overall, with Ethereum volatility estimated at 94%.

Echoes of 2020: A Bullish Formation

One of the leading analysts on B.C. markets, Ted Pillows, has pointed out an interesting technical pattern. Ethereum has forged four straight two-week green candles. This setup is almost an exact mirror of BTC’s price action in early 2020, immediately following the market crash in March. The parallels out BTC in 2020 and ETH in 2024 are uncanny. Many traders think that ETH’s current consolidating will be nothing short of the calm before the storm in the form of a major bullish continuation.

To give a little more context, Ethereum went on huge run during the post-COVID rally in 2020. Following a slump caused by the virus, its price shot back up to close to $500 by the first day of September. This historical precedent makes an even stronger case for Ethereum. This indicates that the second largest cryptocurrency by market cap might be about to experience a new major price rally.

Whale Accumulation: A Sign of Confidence

Ethereum whales, the large holders of the second-largest cryptocurrency, are increasing their positions. If realized, this move would clearly show the market’s strong confidence in Ethereum’s future prospects. Whale-controlled wallets have experienced a 95% increase in net ETH inflow. Such a dramatic increase is testament to a very strong accumulation trend, despite the recent stagnation in price.

On one particular Sunday, wallets holding 1,000-10,000 ETH suddenly moved. Their net position increased by more than 818,410 ETH, which is about $2.5 billion at current ETH prices. This was the largest daily inflow for this cohort in more than six years. Weekly staking inflows are regularly above 60,000 ETH staked per week, powering the accumulation narrative. Large bad exchange netflows indicate strong withdrawal pressure on exchanges, meaning more ETH is being withdrawn from exchanges than deposited. To put it simply, investors are moving their ETH into long-term storage or barring access to their coins. This tightens the circulating supply on exchanges and might even increase their prices. Adding to the optimistic view, one of Ethereum’s richest address cohorts is grabbing ETH at the highest rate since 2018.

Liquidity Dynamics and Market Structure

In order to forecast price movement accurately, it’s important to understand liquidity dynamics and market structure. Ether bulls would target liquidity pockets near $2,500. These levels can serve as psychological magnets, potentially short squeezing and pushing prices higher. The $2,250–$2,290 zone can be seen as another major battleground. A defense at $2,250 would prove that’s an extremely strong support zone. The near-term resistance should be $2,320 and $2,350.

Hourly volumes even hit 751,000 ETH during a series of recent price recoveries. Meanwhile, the price spiked 3.15% to $2,291.09 amid vigorous buyer demand, with a solid volume of 7,314 ETH. A recent price floor just above $2,224 indicates that some short squeeze action could be in store if bulls manage to retake the $2,290 multi-day resistance level. The $2,250–$2,290 range pinches broke bulls in a liquidity squeeze. Whales benefit by soaking up the selling pressure from retail buying the top while they build positions at a discount and life prices.

Institutional Demand and Liquid Staking

Institutional demand is another item working in the bullish case for Ethereum. Liquid staking, which allows investors to stake their ETH and earn rewards while maintaining liquidity, has reached a record 35.5 million ETH. This trend is indicative of the growing interest from institutional investors in the Ethereum network. Thanks to these advancements, they can play the field without losing the option to trade their assets.

Liquid staking lets institutions and others participate in the network and earn rewards without losing liquidity. This is especially attractive to the bigger investors who require active management of their position.