Ethereum $4,000 Rally Incoming?
Ethereum's price has been consolidating recently, but a large outflow of ETH from exchanges is raising expectations for a potential rally toward the $4,000 mark. With reduced selling pressure and strong momentum, ETH could be gearing up for a breakout.
Ethereum (ETH) has recently been trading within a narrow range, reflecting the broader trend of consolidation in the cryptocurrency market. However, a significant event has raised expectations for a potential price rally—an enormous outflow of Ethereum from exchanges, fueling hopes of a breakout towards the $4,000 mark.
Chart by TradingView
ETH Exchange Outflows Reach Multi-Month Highs
On December 14, over 108,000 ETH, worth approximately $418 million at current market prices, were withdrawn from cryptocurrency exchanges. According to Glassnode, this outflow represents the highest amount of Ethereum removed from exchanges in a single day since March 13. Such large withdrawals typically signal that investors are holding onto their ETH, likely in anticipation of further price appreciation, rather than selling.
This outflow suggests a reduction in the available supply of ETH on exchanges, which, in turn, could reduce selling pressure and create an environment conducive to a potential price surge. As a result, ETH could break free from its current narrow trading range if demand continues to build and buying activity increases.
ETH’s RSI Indicates Bullish Momentum
Ethereum’s Relative Strength Index (RSI) is currently at 60.22, positioning ETH in a moderately bullish zone. The RSI is a key indicator used to measure an asset's overbought and oversold conditions, with readings above 70 indicating that an asset might be overbought and due for a price decline, and readings below 30 suggesting potential for a price rebound.
At 60.22, ETH’s RSI signals that demand for the cryptocurrency is still strong but not yet in overbought territory, indicating there may be room for continued upward movement before hitting levels that would signal a pullback.
Currently priced at $3,958, Ethereum is facing resistance at $4,000. If selling pressure continues to ease and buying momentum picks up, ETH could break through this resistance level, potentially aiming for its all-time high of $4,936 reached in November 2021.
