- Ethereum is down 70% from record highs in November 2021.
- The ETH price paints a technical setup with a 30% bullish reversal possibility.
- Moreover, on-chain metrics indicate a rebound ahead.
YEREVAN (CoinChapter.com) — The price of Ethereum’s native token, Ether (ETH), has dropped 70% almost two years after establishing its record high near $4,950. However, in 2023, the coin is eyeing a strong comeback.
Here are three reasons the Ether price could rally by the year’s end.
Ethereum Reaches Key Accumulation Area
The ongoing Ethereum downtrend has taken its price to a level that has previously witnessed immense accumulation sentiment among investors.
The level is a multi-month rising trendline support constituting a broader ascending triangle pattern. The Ether price has bounced inside the triangle since May 2022. And now, with the ETH price retesting its lower trendline as support, the token’s probability of undergoing a sharp price rebound has increased.
As a result of this fractal analysis, the ETH price could rebound to over $1,950 next, up around 30% from current price levels.
Older Coins Moving ETH
Ethereum’s possibility of undergoing a strong bullish reversal further comes from an on-chain metric analysis.
Notably, the metric tracks and measures “mean dollar invested age,” i.e., the average age of all coins/tokens on the blockchain weighted by the purchase price. As a rule, the mean dollar invested age dropping alongside the price indicates capitulation.
Santiment noted that a period of strong capitulation has historically foreshadowed trend reversal. The platform said it while highlighting Ethereum’s most dormant movement in three months, raising the potential for a bullish future reversal.
Spot Ethereum ETF Application
The US Securities and Exchange Commission (SEC) may approve the first Bitcoin-backed exchange-traded fund (ETF) in 2023, according to an insider. The hopes have prompted industry leaders like Cathie Ark to apply for a spot Ethereum ETF, as well.
If approved, a spot Ethereum fund could attract institutional capital to the market, thus raising the underlying demand for Ether. Simply put, it means a price rally.
“Ethereum spot ETFs will be insane, noted Lark Davis, an independent market analyst, adding:
“About 27 million ETH in the staking contract. 14 million left on exchanges. (12% of supply) A few billion dollars entering ETH from tradfi is likely to have outsized price impact.”
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