Ethereum (ETH) investors are demonstrating strong confidence in the cryptocurrency's potential resurgence, as it's recent rebound above the $3,400 mark hints at promising future gains. This sentiment is evident as many holders have opted to retain their positions despite a recent price drawdown, indicating a bullish outlook.
In an intriguing turn, Ethereum's profit-taking activities have dwindled, while positive sentiment among investors has solidified. On December 30, Ethereum's price briefly dipped below the $3,400 level during a short period of stagnation. However, current values have since eclipsed this benchmark. This recovery is largely accredited to investor actions, which have been instrumental in the swift rebound noted recently.
Data from IntoTheBlock reveals an encouraging 40% increase in Ethereum's coin holding time over the past week—a metric that monitors the duration a cryptocurrency is retained without being sold. A rise in this figure suggests an unwillingness to sell, a sentiment reflective of investors' bullish stance on Ethereum's short-term trajectory. Should this trend persist, the cryptocurrency could experience further appreciation beyond current valuations.
Though optimism persists, there has been a decline in on-chain profits. At the end of 2024, Ethereum’s transaction volume in profit stood at 995,000 ETH, now reduced to a mere 661 ETH. Such a decrease tends to confirm the prevailing positive sentiment among Ethereum investors. Further reductions could mitigate selling pressure, potentially fostering an upward price trend.
Technically, Ethereum's bulls have effectively maintained support at $3,328. The Money Flow Index (MFI), an important indicator assessing buy-sell pressure, has also shown growth. An uptick in MFI points to mounting buying pressure. If sustained, Ethereum prices might soon surpass $4,111, possibly climbing toward the $4,500 target.
However, risks remain. Should bearish forces drive prices below the key support level at $3,328, Ethereum could spiral down to $3,081. In an extended bearish scenario, declines could continue to $2,878. The original analysis appeared on BeInCrypto.