Ether primed for breakout following summer crypto dip

Ether may be approaching a breakout, driven by its current valuation and improving macroeconomic conditions following the summer slump in crypto markets.

Currently priced at $2,346, Ether (ETH) could be nearing a local bottom after a five-month downtrend that began in late March. According to crypto analyst and entrepreneur Michaël van de Poppe, a key technical chart pattern signals that Ether might soon break this downtrend. In a Sept. 9 X post, he wrote:

“The bullish divergence remains intact, and a higher low has formed. The months-long downtrend is likely to break upward, potentially sparking a significant market push.”

A bullish divergence, a technical indicator used by traders, signals strengthening market momentum despite lower lows. This pattern is often associated with price reversals and suggests Ether may break out against Bitcoin (BTC).

Ether whales are showing renewed activity after the summer market downturn. A notable whale recently purchased 5,000 ETH, worth over $11.4 million, according to a Sept. 9 X post from on-chain intelligence firm Lookonchain. The whale previously bought 5,200 ETH at an average price of $1,322 in November 2022, then sold it at an average price of $2,093 between December 2023 and January 2024, netting over $4 million.

Whales wield significant influence over a cryptocurrency’s price due to their large capital holdings. Traders often monitor whale activity to gauge short-term price movements.

Despite the introduction of US Ether-based exchange-traded funds (ETFs), Ether has been stuck in a five-month downtrend since late March. Since the ETFs launched on July 23, when ETH was trading above $3,400, Ether's price has fallen over 32%. This is largely attributed to continuous net outflows from the ETFs, which have totaled over $568 million, according to Farside Investors data.

While investors had hoped for a major price surge following the Ether ETF launch, similar to Bitcoin’s ETF-driven rise past $50,000, the anticipated boost has yet to materialize.