Ethereum presented an attractive buying opportunity to investors, but it remained weak against Bitcoin.
- The Ethereum crossover above the weekly Moving Average has not yet occurred. The seller exhaustion constant fell to its 18-month lows, which could be a sign of a low-risk bottom.
Ethereum’s [ETH] short squeeze, on the 16th of June, saw $500 million in short liquidations. The flow of ETH into derivative exchanges was a signal that traders should beware of the potential for a deeper price drop and renewed selling.
Yet, with geopolitical tensions rising, Ethereum continued to trade above $2,400, and Bitcoin [BTC] above $100,000.
The drop in the estimated leverage ratio showed that the volatility earlier this week could serve as a good reset for the futures market, priming ETH for a recovery.
What would be the first sign of an Ethereum breakout?
Source: CryptoQuant Insights
In a post on CryptoQuant Insights, user İbrahim Cosar observed that a decisive rally would first need to move past the 50-period Moving Average on the weekly timeframe.
The November 2024 and October 2023 rallies came after the ETH price breached this moving average.
Source: ETH/USDT on TradingView
The weekly price action showed ETH was coiled below the 50-week Moving Average, unable to climb above this resistance.
A weekly session close would highlight the strong chance of a bullish trend for Ethereum.
Source: Glassnode
The seller exhaustion constant is the product of the percentage supply in profit and the 30-day price volatility. The combination of low percentage supply in profit (high losses) and low volatility would imply a low-risk bottom had formed.
The seller exhaustion constant has fallen below late-2024 levels, matching the January 2024 low.
This suggests Ethereum may have formed a high-probability bottom, despite trading above $2.4k within a range.
Source: Glassnode
The ETH/BTC SOPR provided insight into the relative profitability of coins spent on both networks.
Consistent values below 1 meant investors realized heavier losses or fewer profits on their spent ETH than their equivalents on BTC.
It implied ETH weakness. The ETH/BTC saw a brief resurgence in April, but the SOPR showed that ETH continued to remain weak relative to BTC.
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