Ethereum’s Golden Cross Emerges Amid Low Exchange Reserves, Hinting at Potential Breakout

• The recent resurgence of Ethereum is marked by the formation of a Golden Cross, signaling potential bullish momentum in the crypto market.

• Analysts are closely monitoring exchange reserves, which are at yearly lows, indicating possible accumulation and an optimistic outlook for ETH.

• Renowned crypto analyst @MerlijnTrader pointed out the significance of the Golden Cross, noting its historical correlation with substantial price rallies.

This article explores Ethereum’s recent Golden Cross formation, its historical context, and the underlying market conditions that suggest a bullish phase ahead.

The Golden Cross Returns!

Ethereum’s emergence of a new Golden Cross has captured the attention of traders and investors alike. The 50-day moving average crossing above the 200-day moving average acts as a powerful indicator, historically leading to significant price movements.

As highlighted by @MerlijnTrader, the last occurrence in late 2024 resulted in a remarkable 89% rally, propelling ETH’s price from approximately $1,800 to around $3,400 within two months. Current price levels near $2,500 have traders asking whether history might repeat itself.

Source: X

What Happened Last Time?

The previous Golden Cross in November 2024 initiated a robust bull run for Ethereum. Investors observed a major shift in sentiment, leading to substantial institutional interest as anticipation built around potential spot Bitcoin ETF approvals in the U.S.

During this period, Ethereum’s price soared due to increasing staking deposits, which complemented the favorable market conditions and solidified bullish sentiments heading into year-end.

Back to Bull?

Ethereum’s exchange reserves have recently decreased to 18.7 million ETH, marking the lowest levels in over a year. This decline signifies a trend of sustained outflows, suggesting potential accumulation by investors confident in Ethereum’s future growth.

Source: Coinglass

Funding Rates are currently just slightly negative, indicating that this rally is likely not fueled by exaggerated long positions, which contributes to a healthier market environment for Ethereum’s growth.

In summary, the positive backdrop of diminishing supply and neutral leverage enhances the validity of the Golden Cross signal, potentially paving the way for further price appreciation.

Conclusion

As Ethereum approaches critical price levels once again, the recent Golden Cross formation serves as an optimistic indicator for traders. With exchange reserves at lows and Funding Rates maintaining neutrality, market conditions appear conducive for a sustained upward trend. Investors will be keenly monitoring price movements as Ethereum aims for new heights.