Ethereum’s $1 Billion Outflow: Is a Return to $3.4K Possible Amid Rising Accumulation?

Ethereum (ETH) recently witnessed a surge in outflows exceeding $1 billion, prompting discussions about its potential to retest the $3,400 mark.

• As the altcoin’s price declined from $3,400, many investors began accumulating ETH.

• The NVT ratio indicates that Ethereum might be undervalued, reflecting a healthy market sentiment.

This article explores Ethereum’s recent outflows, market movements, and insights into its potential price recovery and future trends in the crypto space.

Ethereum’s Significant Outflow Surge

The recent data released by IntoTheBlock revealed that Ethereum recorded an outflow exceeding $1 billion last week, marking a notable high not seen since May 2023. This development coincided with similar patterns observed in Bitcoin (BTC), which also saw increased outflows at the same time.

An increase in outflows often signifies heightened accumulation among investors. Such a phenomenon can sometimes be attributed to recent price fluctuations; ETH’s price notably pulled back from the $3,400 level, presenting a buying opportunity. According to Hyblock Capital, ETH’s buy volume shot up to 100 on November 12, coinciding with the date of the price dip.

Source: Hyblock Capital

Subsequently, Ethereum’s price began to recover after reaching a support level near $3,000, showing a modest increase of almost 3% within 24 hours and trading at approximately $3,117.03. This rebound suggests that investors are bullish on Ethereum’s prospects, further supported by ETH’s low net deposits on exchanges as reported by CryptoQuant, indicating strong buying sentiment among U.S. investors.

Market Metrics Indicate Bullish Sentiment

Evidently, the underlying metrics provide further evidence of a bullish trend. Ethereum’s NVT ratio has seen a significant dip over the past two weeks, often a sign that an asset is undervalued. A plummeting NVT ratio suggests that there may soon be a price recovery, supported by external factors influencing market sentiment.

Source: Glassnode

Additionally, the moving average (MA) crossover indicator shows that Ethereum’s 9-day moving average remains significantly above its 21-day moving average, reinforcing the potential for an extended uptrend if the market conditions remain favorable.

Future Price Outlook for Ethereum

The positive movements and metrics suggest that Ethereum may indeed sustain its upward momentum; however, the market remains volatile. If Ethereum can maintain its position above the key support level of $3,000, the price may soon challenge the resistance at $3,380. Nevertheless, should the market experience a reversal and ETH falls below $3,000, there remains a risk of a more significant pullback to $2,700.

Source: TradingView

Conclusion

In summary, Ethereum’s recent surge in outflows and investor interest paints a potentially positive outlook for the altcoin. With critical market indicators signaling undervaluation and sustained buying activity, Ethereum is on a path that could lead to further price increases in the near term. Investors should remain vigilant around the key support and resistance levels as they navigate this dynamic market landscape.