• Ethereum is experiencing a strong recovery with whales purchasing 240,000 ETH following a recent price dip.
  • Coinbase Advanced saw over $1 billion in ETH outflows, marking the fifth instance this year, signaling bullish momentum. Additionally, reduced inflation reported in the US CPI for May has further bolstered optimism, suggesting Ethereum may soon enter a key price range.

Ethereum (ETH) is exhibiting signs of a robust recovery following a significant uptick in exchange outflows and increased buying activity from large holders. The cryptocurrency, which saw a more than 3% increase on Wednesday, is buoyed by these positive developments and encouraging economic indicators.

Massive Outflows and Whale Purchases

Ethereum whales, defined as holders of between 10,000 and 100,000 ETH, recently acquired around 240,000 ETH, valued at approximately $840 million. This substantial purchase followed a dip in ETH prices, indicating a possible bullish outlook among these significant investors.

Moreover, Coinbase Advanced reported ETH outflows worth over $1 billion within a 24-hour period, marking the fifth instance in 2024 of single-day outflows exceeding 150,000 ETH. This massive withdrawal, if not an internal transfer, could signify a highly bullish sentiment as large holders possibly anticipate a price surge. Historical patterns suggest that such large-scale outflows often precede positive price movements, similar to the activity observed before spot Bitcoin ETFs were launched.

A CryptoQuant analyst highlighted that these movements might be from institutions or whales expecting the approval of spot Ethereum ETFs in the coming weeks. The SEC recently approved eight issuers’ spot ETH ETF applications, including major names like BlackRock and Fidelity, raising hopes for a further price rally.

Positive CPI Data Boosts Market Sentiment

The U.S. Consumer Price Index (CPI) for May reported a reduced inflation rate of 3.3%, lower than the anticipated 3.4%. This data has injected further optimism into the market, helping ETH to trade around $3,619 on Wednesday.

Technical analysis reveals a promising outlook for Ethereum. The 7-day moving average of the ETH Taker Buy Sell Ratio, which assesses the relative volume of perpetual derivatives buyers versus sellers, is a key indicator of market sentiment. A value above 1 denotes bullish sentiment, whereas below 1 indicates bearish sentiment. Although the ratio has been declining, failing to push above 1, the positive CPI data may shift this trend if more traders perceive it as a bullish signal.

Additionally, ETH liquidations over the past 12 hours have shown a significant wipeout of short positions, totaling over $10 million, compared to $1.8 million in long positions. This suggests a shift in market momentum favoring the bulls.

If this bullish sentiment continues, Ethereum is expected to enter the price range of $3,710 to $3,900 shortly. However, a drop below the $3,457 level could negate this bullish thesis.

With the combined effects of significant whale activity, reduced inflation, and the anticipation of spot ETH ETF approvals, Ethereum appears poised for a notable recovery, setting the stage for a potentially strong performance in the near term.