The second-largest crypto Ethereum (ETH), continues to establish an uptrend as it trades just above the 50-day Simple Moving Average (SMA). Trading at $1,890 at the time of writing, on Friday, June 2, Ethereum price is up 1.72% in the last 24 hours.
If support provided by the 50-day SMA is upheld, traders could expect Ether to build momentum for a breakout above $2,000. On-chain shows that more Ethereum is being held in self-custody wallets than on exchanges. This points to increasing investor confidence in the proof-of-stake (PoS) token
Ethereum Bulls Could Exploit A Bullish Triangle To $3,000
After turning away from the $2,030 in August, ETH, the token that powers the Ethereum ecosystem, dropped 46% to set a swing low at $1,074. Since then, Ether’s price has struggled with recovery with the resistance at the $2,000 psychological level proving hard to overcome.
Note that bulls successfully pushed ETH above this level in mid-April when the price rose to $2,138. This turned out to be a fakeout as the altcoin is now trading around 11% below this swing high.
Note that Ether’s price action since August has led to the appearance of an ascending triangle on the daily chart (below). This is a highly bullish chart formation that points to a massive move upward once it is confirmed.
In Ethereum’s case, the technical pattern would be confirmed if a daily candlestick close is achieved above the resistance line at $2,026. If this happens, the price could rise to collect the liquidity above it moving first toward the $2,500 psychological level and later tag the technical target of the governing chart pattern at $2,970.
Such a move would represent a 56% uptick from the current price. Market participants could expect Ethereum to take a breather here for a few days before resuming the uptrend.
ETH/USD Daily Chart
Several technical indicators supported the bullish outlook for Ethereum. First, the price sat on robust support downward. These were areas defined by the 50-day SMA at $1,882, the 100-day SMA at $1,800 and the 200-day SMA at $1,594. Other areas of support included the $1,500 psychological level and the $,1200 support wall.
Additionally, the Relative Strength Index (RSI) was pointing upward. The price strength at 55 above the midline suggested that the buyers were slightly stronger than the sellers.
This was further reinforced by the Arms Index (TRIN) which was close to the green line. Its value at 0.87 suggested that there were more buyers than sellers in the market, adding credence to the positive outlook.
Further validating the bullish narrative for Ethereum was on-chain metrics from Santiment, a blockchain data and market behavior analytics firm. Its Supply on Exchanges metric showed that ETH supply on exchanges was decreasing, reaching lowest levels ever..
The firm posted the following chart of Twitter saying:
“Ethereum is now being held in self custody and away from exchanges at the highest level since the week the token was introduced nearly 8 years ago. This essential all-time low ratio of $ETH on exchanges (10.31%) indicates confidence from #hodlers. ”
ETH Supply On Exchanges
From the chart above, it can be seen that the amount of ETH tokens being held in non-exchange wallets has reached its all-time high since the token was launched more than eight years ago. This points to increasing confidence from holders.
When investors move their crypto from exchanges, it means that they are not planning to sell them at the moment. They are holding on to them in anticipation that price would increase in future, which is a bullish sign.
On the flip side, losing the 50-day SMA at $1,882 or the 100-day SMA at $1,800 could spell doom for Etherum’s price. Such a case would take it below the prevailing chart pattern, confirming a bearish breakout.
Key levels to watch on the downside are the 200-day SMA at $1,594 and the $1,500 psychological level. This is where Ether’s downside could be capped in the near-term.
