Ethereum rallied 2.2% in the past 24 hours following the Federal Reserve's expected quarter-point interest rate cut, trading above $4,600 as technical indicators and blockchain data suggest the cryptocurrency could target $5,430. The move comes as selling pressure drops to six-month lows, with spent coins falling 83.5% from recent peaks while exchange outflows indicate accumulation among investors.
What to Know:
- Ethereum's spent coins metric dropped from 257,000 to 42,700 coins, marking an 83.5% decline and the lowest level in six months
- Technical analysis shows a cup-and-handle pattern breakthrough with a potential price target of $5,430 if resistance at $4,765 holds
- Exchange outflows increased 8% since September 14, rising from -147,600 ETH to -159,000 ETH, signaling accumulation activity
Technical Patterns Signal Bullish Momentum
Chart analysis reveals Ethereum has completed a cup-and-handle formation, a pattern that often precedes significant price advances. The breakout zone sits near current levels, with the pattern's neckline positioned around $4,765.
If Ethereum maintains trading above this threshold, technical projections point toward $5,430 as the primary upside target. This level would represent a fresh yearly high for the second-largest cryptocurrency by market capitalization.
The Chaikin Money Flow indicator supports this outlook, climbing from -0.18 on September 15 to approach neutral territory. A move into positive values would confirm net capital inflows alongside the technical breakout. Key support levels remain at $4,489 and $4,424, with a drop below $4,213 potentially invalidating the bullish setup.
On-Chain Metrics Confirm Reduced Selling Activity
Blockchain data provides additional evidence of diminishing sell-side pressure across multiple indicators. The Spent Coins Age Band metric, which tracks cryptocurrency movements from wallets to exchanges, shows dramatic declines in recent days.
September 17 data recorded approximately 257,000 ETH in daily spending activity across all age categories.
Current figures show just 42,700 ETH, representing the steepest drop in six months. This reduction suggests long-term holders are maintaining positions rather than liquidating during price strength.
Net Unrealized Profit and Loss data reinforces this trend. After reaching local lows on September 16, NUPL has recovered above $0.50, approaching levels seen on September 11 when Ethereum gained nearly 6%. The metric indicates fewer wallets hold significant unrealized gains, typically occurring when short-term traders exit positions.
Exchange flow patterns provide the third confirmation of changing investor behavior. Net outflows have expanded from approximately -147,600 ETH to -159,000 ETH since September 14, marking an 8% increase in coins leaving trading platforms. This movement typically indicates accumulation as investors transfer holdings to personal wallets for longer-term storage.
Market Context and Federal Reserve Impact
The Federal Reserve's 25 basis point rate reduction Wednesday marked the central bank's first cut since 2020, though markets had fully anticipated the move. While most risk assets showed minimal immediate reaction due to the decision being "priced in," Ethereum's outperformance suggests cryptocurrency-specific factors are driving demand.
Lower interest rates generally benefit risk assets by reducing the opportunity cost of holding non-yielding investments like cryptocurrencies. The rate environment may be contributing to renewed interest in digital assets among institutional and retail investors alike.
Ethereum's recent performance occurs amid broader cryptocurrency market stability, with the asset maintaining its position as the second-largest digital currency by market value. The blockchain's role in decentralized finance applications and smart contracts continues attracting developer activity and user adoption.
Understanding Key Cryptocurrency Terms
Several technical indicators mentioned require explanation for broader market understanding. The cup-and-handle pattern represents a bullish continuation formation where prices form a rounded bottom followed by a smaller consolidation period before breaking higher.
NUPL measures the difference between realized and unrealized profits across all wallet addresses, providing insight into overall market sentiment. Values above zero indicate net profits, while negative readings suggest widespread losses. Exchange flows track cryptocurrency movements between trading platforms and personal wallets, offering clues about investor intentions. Large outflows typically signal accumulation, while significant inflows may indicate preparation for selling.
Conclusion
Multiple technical and fundamental factors align to support Ethereum's current bullish outlook, with selling pressure reaching six-month lows while chart patterns suggest potential upside toward $5,430. The combination of reduced on-chain activity, improving money flow indicators, and successful technical breakouts provides a foundation for continued strength, though key resistance levels must hold for the bullish scenario to materialize fully.