Ethereum has been trading below $1600. On the daily timeframe chart, the asset’s price recently created lower lows. At the same time, its RSI formed higher lows, resulting in a bullish divergence. Conventionally, this situation depicts that bears are losing power and bulls are gearing up to control the market again. More often than not, bullish divergences are followed by relief rallies.
In the weekly timeframe, ETH continues to remain engulfed within its macro-rising wedge. Technically, this structure is bearish in nature. However, given the current sentiment flip in the short term, there are more odds of a bounce back from the lower trendline instead of registering a breakdown from that level. Consequentially, this has the potential to trigger a 12% uptick for ETH.
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That being said, ETH might not register a spike straight off the bat. The ascent will be gradual because profit booking has already started. The exchange net flows have been in green over the last couple of days. Specifically, on Sept. 26, 2023, the reading of this metric flashed a value of +54,246.33. This means there are more people selling ETH by sending them to exchanges currently.
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Alongside, data from IntoTheBlock revealed that wallets with zero balance have risen by roughly 13% over the past week. This means a significant number of users have transferred out all of their tokens, ringing another bell of caution. Thus, if the pressure on these two ends continues to escalate, ETH could end up dropping to $1422 over the medium term. At press time, the $191 billion-worth asset was seen exchanging hands at $1591.6.
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