Bulls need to hold $2,500, Spot ETF to stimulate demand

Ethereum, like most altcoins, is under significant selling pressure as it struggles to shake off the weakness seen in early August. While there have been flashes of strength since the peak sell-off on August 5, prices are still trading below $2,800.

The only positive so far, at least looking at the daily chart, is the bulls’ impressive resilience. Despite a wave of lower lows, buyers have soaked up the flood of selling pressure, keeping prices above $2,500.

Despite all this, the bearish pattern is still holding, but one analyst believes that rejection of lower prices below $2,500 is key.

Ethereum bulls need to keep prices above $2,500

In the post on X analyst he said that bulls need to keep Ethereum above $2,500 for the uptrend to continue. The round number, looking at the price evolution on the daily chart, marks the base of the bull flag.

Over the past few trading days since the August 8 spike, Ethereum has been trading below the $2,700 and $2,800 resistance zones. At the same time, support is clearly holding at $2,500. As price action consolidates, a bull flag has formed, signaling strength.

ETH bulls need to find support at $2,500 | Source: @CryptoMichNL via X

According to the analyst, if buyers hold $2,500 as an anchor, Ethereum is poised to take flight, reaching $3,150 in the next session. A rebound is welcome considering that the August 1-5 sell-off was a bearish breakout pattern. This sell-off broke through critical support zones from April to July 2024.

Ethereum price moves sideways on daily chart | Source: ETHUSDT on Binance, TradingView

Spot ETF Impact and Ecosystem Growth

The analyst added that the growth will likely be fueled by inflows into Ethereum spot ETFs. Since the approval of spot ETFs in July, institutions have been interested in finding exposure.

Moving on to X, one ETF analyst notes that inflows now exceed $2 billion, excluding outflows from Grayscale’s ETHE. During this period, BlackRock’s iShares Ethereum ETF has driven demand.

In addition to the inflow of funds from Ethereum spot ETFs, Vitalik Buterin thinks There have been positive developments that could support prices. Among them is the decline in gas charges on the main network and through layer 2 solutions such as Base.

The co-founder further noted that Arbitrum and Optimism’s efforts towards decentralization are immense. Arbitrum and Optimism recently announced their bug-proofing. However, Optimism reverted to a centralized, bug-proof system after an audit report, which allowed the bugs to be fixed.

Featured image from DALLE, chart from TradingView