Ethereum’s native token ether (ETH) may be on the cusp of a major bullish breakout, as its recent price action is mirroring the patterns observed during the market bottom in August. A confluence of factors, from surging trading volume to large institutional inflows, are painting a promising picture for the second-largest cryptocurrency.
Déjà Vu: Ether Price Echoes August Bottom
Despite a steep 32% correction since mid-December that saw ether plunge to around $2,770, keen observers have noted striking similarities between the current price action and the August market bottom. Monday’s trading session, in particular, was marked by extreme volatility, with ether plummeting to nearly $2,000 on some exchanges before rebounding sharply to $2,700 – the largest single-day swing since September 2021.
This dramatic two-way price action resulted in an explosive surge in trading volumes on major platforms like Coinbase and Bitstamp, reaching levels not seen since the August bottom. High volume during such volatile periods often signals peak selling pressure, as weak hands capitulate and stronger buyers step in, setting the stage for a potential trend reversal.
Rewind to August 5th and we see an uncannily similar setup – ether printed a local low around $2,100 amidst heavy two-way action and record volumes. What followed was a multi-week consolidation between $2,200-$2,800, which ultimately resolved to the upside as a new bullish phase emerged, propelling ether to a high of $4,100.
Institutional Demand Underpins Dip
The bullish case for ether is further reinforced by evidence of strong dip-buying by institutional players. According to Jake Ostrovskis, an OTC trader at leading crypto market maker Wintermute, there was robust over-the-counter demand for ether during Monday’s volatility.
“I am noting strong over-the-counter demand for ETH, which is particularly noteworthy amid broker chatter around a fund blowing up amidst weekend volatility,” said Ostrovskis.
– Jake Ostrovskis, Wintermute
In addition, U.S.-listed spot ether ETFs registered inflows of $420 million this week, equivalent to nearly 13% of their total assets under management, signaling conviction from institutional investors even in the face of extreme price turbulence.
Bullish Bias in Derivatives Markets
The optimism isn’t confined to the spot markets either. A large bull call spread was detected on Deribit this week, involving a long position in the $3,500 call option and a short position in the $5,000 call, both expiring on December 26, 2025. This options structure aims to capitalize on a potential rally to $5,000 and beyond by year-end.
Taken together, the price action analogue to the August bottom, resurgent institutional dip-buying, and bullish positioning in the options market paint a compelling picture of a potential major bull run in the making for ether.
However, it’s crucial to temper the euphoria with a dose of caution. The macro backdrop remains challenging, and bitcoin – ether’s biggest companion – is still trading sluggishly. A sustained decoupling of ether from bitcoin, or a broader crypto market rally led by the largest digital asset, may be necessary to lend credence to the bull case.
Eyes on the Horizon
For ether bulls, the next few weeks will be critical to watch for confirmation of the August bottom analogue. Some key milestones to monitor include:
- Holding the $2,700 support that acted as a launchpad in August
- A definitive break above $3,200 to signal a new uptrend forming
- Continued evidence of institutional dip-buying and bullish options flows
- Signs of ether decoupling from a stagnant bitcoin, or a broader market rally
As always in the volatile cryptocurrency markets, there are no guarantees. But for now, the stars seem to be aligning for ether to potentially stage a major bullish breakout. The coming days and weeks will be key to see if this moment of promise blossoms into the next great bull run, or fizzles out as another false dawn.
Regardless of the immediate outcome, the long-term fundamentals of Ethereum remain robust with ongoing development and adoption. For believers in the smart contract platform’s transformative potential, the current juncture may represent an attractive opportunity to accumulate ether for the road ahead.
Rewind to August 5th and we see an uncannily similar setup – ether printed a local low around $2,100 amidst heavy two-way action and record volumes. What followed was a multi-week consolidation between $2,200-$2,800, which ultimately resolved to the upside as a new bullish phase emerged, propelling ether to a high of $4,100.
Institutional Demand Underpins Dip
The bullish case for ether is further reinforced by evidence of strong dip-buying by institutional players. According to Jake Ostrovskis, an OTC trader at leading crypto market maker Wintermute, there was robust over-the-counter demand for ether during Monday’s volatility.
“I am noting strong over-the-counter demand for ETH, which is particularly noteworthy amid broker chatter around a fund blowing up amidst weekend volatility,” said Ostrovskis.
– Jake Ostrovskis, Wintermute
In addition, U.S.-listed spot ether ETFs registered inflows of $420 million this week, equivalent to nearly 13% of their total assets under management, signaling conviction from institutional investors even in the face of extreme price turbulence.
Bullish Bias in Derivatives Markets
The optimism isn’t confined to the spot markets either. A large bull call spread was detected on Deribit this week, involving a long position in the $3,500 call option and a short position in the $5,000 call, both expiring on December 26, 2025. This options structure aims to capitalize on a potential rally to $5,000 and beyond by year-end.
Taken together, the price action analogue to the August bottom, resurgent institutional dip-buying, and bullish positioning in the options market paint a compelling picture of a potential major bull run in the making for ether.
However, it’s crucial to temper the euphoria with a dose of caution. The macro backdrop remains challenging, and bitcoin – ether’s biggest companion – is still trading sluggishly. A sustained decoupling of ether from bitcoin, or a broader crypto market rally led by the largest digital asset, may be necessary to lend credence to the bull case.
Eyes on the Horizon
For ether bulls, the next few weeks will be critical to watch for confirmation of the August bottom analogue. Some key milestones to monitor include:
- Holding the $2,700 support that acted as a launchpad in August
- A definitive break above $3,200 to signal a new uptrend forming
- Continued evidence of institutional dip-buying and bullish options flows
- Signs of ether decoupling from a stagnant bitcoin, or a broader market rally
As always in the volatile cryptocurrency markets, there are no guarantees. But for now, the stars seem to be aligning for ether to potentially stage a major bullish breakout. The coming days and weeks will be key to see if this moment of promise blossoms into the next great bull run, or fizzles out as another false dawn.
Regardless of the immediate outcome, the long-term fundamentals of Ethereum remain robust with ongoing development and adoption. For believers in the smart contract platform’s transformative potential, the current juncture may represent an attractive opportunity to accumulate ether for the road ahead.
