Stephen Suttmeier, former Head of Technical Strategy at Bank of America, believes Ethereum could be forming a “tactical bottom.”
In his recent analysis report, Suttmeier said that if the price stays above $1690-$1700, it would support his thesis of the altcoin forming a tactical low above its June lows. Another confirmation for this bottoming pattern would be a reclaim of $1800.
His projection was based on technical analysis, particularly using moving averages (MA) to gauge short- and long-term momentum shifts. As of press time, the Ethereum [ETH] price has briefly stalled below the 50-day MA (DMA).
Should the 50DMA be decisively reclaimed as support (ETH price above $1800), the next upside target would be the 200-day MA(blue line) at $2.2K, Suttmeier added. That would imply a 25% upside potential if the $2.1K obstacle is cleared.
In fact, even Bitmine Immersion Technologies chairman and Fundstrat’s Tom Lee shared Suttmeier’s analysis, implying that he supported his projection.
Well, if there’s no bearish catalyst in the short term, the ETH daily chart leaned more toward a potential bullish reversal. It had formed a double bottom reversal pattern after the price slipped below $1600 twice in the past few weeks.
But some on-chain metrics were not as bullish on ETH as price charts suggested.
Ethereum’s exchange sell pressure is still high
CryptoQuant reported a 6% surge in exchange selling pressure in the past few days as ETH attempted a rebound. Over 220K Ethereum [ETH] hit exchanges, slowing the relief rally near $1800.
And the whales were notably reducing exposure during the relief rally. As such, the brief stalling below $1800 did not come as a surprise. As of writing, the whale sell-off had not tapered off.
In fact, the exchange selling pressure has been steadily rising since March. Hence, if the pressure persists, the ‘tactical bottom’ outlook could be invalidated.
Can ETF flows and macro risks derail ETH?
Apart from the whale pressure, the U.S. Spot ETF demand, which significantly boosted the early July relief recovery, has turned negative.
After seeing net inflows for five straight days, the trend broke on Thursday after the products posted a $52M net outflow. The risk-off move was triggered by renewed Iran-U.S escalations and bond market jitters.
Overall, ETH was on the verge of flipping its short-term momentum to bullish if it decisively stays above $1800. A 25% upside potential could be feasible if such a scenario plays out. But macro and geopolitical pressures remained at large and could affect bulls.
Final Summary
- ETH could hit $2100 and offer a 25% potential gain if $1800 is decisively reclaimed.
- Macro and geopolitical pressure could invalidate the bullish outlook, especially if the U.S-Iran escalations deepen
