Ethereum (ETH) has experienced price volatility recently, but the overall outlook remains promising. Currently, the price of Ethereum is $3,065, and despite mixed market sentiment recently, several factors suggest that ETH could rise to $4,522 in the short term.
First, it is worth paying attention to the performance of Ethereum ETF (Exchange Traded Fund). On Thursday alone, ETH ETF achieved a net inflow of $146.9 million, marking the sixth consecutive day of positive inflows for the product, and the total inflow for six days was close to $800 million. This shows that institutional investors' confidence in Ethereum is gradually recovering and they are increasing their investment, further supporting the possibility of Ethereum's price increase.
However, while the market is optimistic about Ethereum, on-chain data shows some pressure. According to IntoTheBlock, about 94,400 ETH were redeemed in the past 48 hours, worth more than $300 million. This large-scale redemption may increase market supply pressure, thereby bringing downside risks to prices. In addition, Ethereum's exchange reserves are also rising, indicating that more ETH may be transferred to exchanges, increasing the pressure to sell.
Despite this, ETH's technical chart still shows positive signs. ETH is currently forming an inverted head and shoulders pattern, which often means a price reversal. If ETH evolves according to this pattern, breaking through the yearly high of $4,093 is entirely possible, and further gains can even push it to $4,522. However, it must be noted that the market volatility remains high, especially with the current 14-day relative strength index (RSI) trending down. If the RSI falls further below its moving average, ETH may fall back to $2,817.
Another factor to watch is Ethereum's on-chain behavior. Recently, large transactions (over $100,000) have dominated the market, with daily transactions exceeding 10,000 for the first time since August, showing the activity of whale investors in the market. This flow of funds may have an impact on ETH prices in the short term, especially when market sentiment fluctuates.
Overall, although Ethereum faces some short-term market pressures such as redemption flows and increased exchange reserves, the continued inflow of institutional investment and positive signals from technical graphics make ETH's upside potential still strong. If ETH can break through the key resistance level of $4,093 and continue to follow the trend of the inverted head and shoulders pattern, a price increase to $4,522 will become possible.
However, investors need to be vigilant about market fluctuations, especially in an environment of high volatility and uncertainty, where the price of ETH may reverse quickly. Monitoring on-chain traffic and market sentiment will help adjust trading strategies in a timely manner and seize opportunities in market fluctuations.
