Ethereum (ETH) Price Eyeing Rally to $2,700 Amid Strong Exchange Outflows

Having retested the $2,100 level, Ethereum (ETH), the second-largest cryptocurrency globally, is poised for an upward movement. At the time of reporting, the Ethereum (ETH) price stands at $2,200, with a market capitalization of $264 billion.

Ethereum Exchange Outflows

Despite the current ETH price volatility, the Ethereum supply at the exchanges has hit a new low. This is a positive indicator showing that more investors are willing to hold their ETH for the long term.

Santiment, an on-chain data provider, reports that with Ethereum’s market value slightly above $2,170, major exchange wallets are actively transferring coins to smaller wallets or withdrawing them from exchanges altogether. In the past 24 hours, a total of 240,000 ETH has been shifted from these large wallets, representing a 2.99% decrease in the amount of coins held.

Renowned crypto analyst Michael van de Poppe suggests that while altcoins are exhibiting strength, it might not be a definitive trend at this point. He notes that Ethereum (ETH) currently lacks momentum, but anticipates a shift in the coming weeks. Van de Poppe predicts a money flow from Bitcoin to Ethereum, leading to a strong performance by altcoins in the first quarter of 2024, potentially coinciding with a peak in Bitcoin dominance.

ETH Price Action

In Tuesday’s trading session, Ethereum made an early attempt at a rally, amidst the ongoing market noise. The $2100 level emerges as a crucial support, having played a significant role in the past. This level, once a resistance point in the broader market, witnessed repeated challenges from an ascending triangle. Short-term pullbacks are expected to find support around this area. Even in the event of a breakdown below $2100, the 50-Day EMA is anticipated to provide substantial support, warranting close attention to this zone.

On the optimistic side, traders are eyeing the $2500 level as a potential target, with a considerable push expected from market participants aiming to drive Ethereum in that direction. Beyond that, the $2700 level comes into focus. The prevailing trend indicates a scenario where traders consistently seize value during every dip, reflecting an active pursuit of value by the majority of crypto traders.

However, a breakdown below the 50-Day EMA could have negative implications for Ethereum. Additionally, the market’s sensitivity to changes in interest rates, particularly in the United States and other bond markets, is noted. Any resurgence in rates is likely to exert pressure on the market, potentially leading to a broader decline in the crypto markets, not limited to Ethereum.