Ethereum [ETH], at the time of writing, traded hands for $1,341. On September 22, the alt closed a 30% retracement from its September high of $1,789. A far cry from what many investors expected from the most important month of the year. On the upside, the alt was trading at a steeper discount and flashing signs of recovery recovery.
ETH may not have retested its 2022 lows, but the 30% discount pushed it back to mid-July levels. Another 30% drop is sure to trigger that YTD low retest. While another crash was still possible, ETH’s latest performance suggested that a bullish retracement was in the works in the near term.
Feeding the bulls
A 30% discount in the last two weeks was big enough to attract a lot of attention and potential accumulation. The outflows of ETH exchanges registered a significant increase in outflows. This was the largest outflow since mid-June.
Source: Santiment
About 104,000 ETH flew out of the exchanges between September 21 and 22. This amounted to about $132 million in buying pressure. In contrast, about 18,000 ETH was deposited on exchanges during the same period. The outflow from the stock market was much larger than the inflow, confirming a strong increase in demand.
ETH’s 180-day Market to Realized Value (MVRV) ratio has taken a plunge since Sept. 10, around the same time the price plummeted. This confirmed that most of the people who had ETH at the time, especially those who bought pre-Merge, are out of money. However, the same statistic registered a slight increase over the past two days.
Source: Santiment
The MVRV’s pivot in the Sept. 21 confirmed a surge in demand near current lows. It also reflected higher exchange outflows observed in the outflow versus inflow statistics.
ETH’s price action and indicators also confirmed short-term bullish expectations. ETH’s six-hour chart revealed a strong bearish candle towards the end of the September 21 trading session. The pullback pushed the price lower from the previous low a day earlier. Despite this outcome, the Relative Strength Index (RSI) registered a higher low from its previous high.
Source: TradingView
The above outcome underscored a price-to-RSI divergence. This is often considered a bullish result and could be a sign that ETH is heading for a bullish weekend.
In addition, ETH’s on-chain stats combined with price action boosted ETH’s near-term bullish potential. Investors should note that despite the latter drawback, ETH was not yet oversold. So there is still a potential for a further decline below current levels.
This post Reasons Ethereum [ETH] traders could witness short term gains this weekend
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