3 reasons why Ether price remains bullish around $3,500

Nancy Lubale8 hours ago3 reasons why Ether price remains bullish around $3,500Despite Bitcoin’s sell-off to $65,000, ETH continues to show strength, and bulls appear to be strengthening at the $3,500 level.995 Total views38 Total sharesListen to article 0:00Altcoin WatchOwn this piece of crypto historyCollect this article as NFTJoin us on social networksEther (ETH) dropped to a low of $3,363 on June 16 after slipping 15% from $4,000. The second-largest cryptocurrency by market capitalization is down 4% over the last seven days.

Data from Cointelegraph Markets Pro and TradingView show Ether’s price hovering around $3,518, about 14% below its multi-year high of $4,091 set on March 12.ETH/USD daily chart. Source:TradingView

Accompanying Ether’s decline is a 43% leap in daily trading volume, currently at $14 billion, reinforcing the high sell-side activity.

Despite this gloomy outlook, ETH appears to have found support from the $3,500 level, and several technical and onchain metrics point to an upside potential for Ether.Reducing supply on exchanges

One factor supporting Ether’s upside is reducing supply on exchanges. According to onchain data provider CryptoQuant, Ether balances on exchanges reached a five-year low of 16.7 million ETH following a 9.3% drop over the past 90 days.ETH reserve on exchanges. Source: CryptoQuant

The total balance between inflows and outflows among centralized exchange wallets shows a steep decline between May 20 and June 14, when withdrawals from the trading platforms began to surge. This drop accompanies a 14% rise in Ether’s price over the same period.

A decreasing ETH supply on exchanges simply means investors could be withdrawing their tokens into self-custody wallets, indicating a lack of intention to sell in anticipation of a future price increase.

This is explained by a spike in accumulation by large holders over the last few weeks. Additional data from market intelligence firm Santiment shows that wallets holding between 10,000 and 100,000 ETH have risen since May 25.

In a June 16 post on X, popular trader Ali Martinez shared a Santiment chart, saying:“Ethereum whales have bought over 700,000 ETH in the past three weeks, totaling approximately $2.45 billion!”Number of wallets with 10,000–100,000 ETH. Source: Santiment

This means that whales have not sold on ETH’s latest rally to $4,000, fueled by the approval of spot Ether exchange-traded funds (ETFs) in the United States. Instead, they have continued to accumulate, suggesting most want to position themselves for more gains.Spike in Ether’s open interest backs ETH upside

Increased demand for leverage resulted in a surge in ETH futures open interest (OI), which increased from $15.06 billion on June 14 to the current value of around $16.15 billion.Ether futures aggregate open interest, USD. Source: CoinGlass

Data from CoinGlass shows that Ether futures OI broke back above $12 billion on May 21 after dropping below this level on April 14. From there, tOI has jumped nearly 36% in less than 30 days, suggesting increased demand for leveraged ETH positions.

Ethereum’s onchain and derivatives markets reflect investors’ optimism and expectation for a spot Ether ETF launch over the coming weeks.

From a technical point of view, ETH’s latest drop precedes a period of growing bullish divergence between its price and the relative strength index (RSI) in the four-hour time frame.

Ether’s price dropped between June 10 and June 14, forming lower lows. But in the same period, its daily RSI climbed, forming higher lows.ETH/USD four-hour chart. Source:TradingView

In technical analysis, a bullish divergence between falling prices and a rising RSI indicates weakness in the prevailing downtrend, prompting traders to secure discounts at local lows.Launch of spot Ether ETFs to drive ETH price higher

The historic approval of spot Ether ETF applications on May 23 by the United States Securities and Exchange Commission (SEC) saw the price rally more than 12% to brush shoulders with $4,000. Before that, the price jumped 33% in less than a week in anticipation of the approval.

Market participants are now eagerly waiting for the spot Ether ETFs to begin trading, with analysts setting July 2 as the possible launch date.

According to Bloomberg senior ETF analyst Eric Balchunas, spot Ether ETFs could potentially begin trading in the U.S. by July 2.Source:Eric Balchunas

Balchunas’ comments signaled a turnaround in confidence from his previous stance when he claimed that Ether ETF applicants were still waiting for feedback from the SEC while debating whether to push back his July 4 prediction.“Note: our previous over/under was July 4th so this isn’t major shift but 1) we started to feel like it would take longer so this is kinda good news and b) we basically decide the over/under on where are most torn 50-50 on where to bet and July 2nd is that date right now.”

On May 23, the SEC approved eight 19b-4 filings to list spot Ether ETFs on various U.S. exchanges. However, they are not allowed to start trading until they have the required S-1 registration statement approvals.

As market participants anticipate the launch of spot Ether ETFs, they also anticipate Ether’s price rising significantly in the days before and after the debut.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.# Cryptocurrencies# Altcoin# Ethereum# Altcoin Watch# Ether Price# Ethereum Price# Ethereum ETF# ETFAdd reaction