Ethereum has gained nearly 20% against Bitcoin over the past two weeks. The supply of Ethereum held by whales increased by nearly 7% over the same period. Capital rotation signals a potential altcoin season as Bitcoin hits $104,000 and traders take profits.
Ethereum (ETH) was hovering near the $4,000 level early Thursday. The second-largest cryptocurrency is preparing to test its 2021 peak of $4,868. Technical indicators support the bullish thesis for Ethereum.
Ethereum and altcoins in the top 50 rose alongside Bitcoin (BTC) as the cryptocurrency reached the $100,000 milestone and rose to an all-time high of over $104,000.
On-chain indicators indicate increased Ethereum accumulation by whales and a decrease in exchange supply, both of which will lead to further ETH appreciation.
Ethereum rivals Bitcoin, rising 20% in two weeks
As seen in the ETH/BTC price chart on Tradingview, Ethereum has risen nearly 20% against Bitcoin over the past two weeks. Even as Bitcoin surpasses the $100,000 milestone and expands its rally, Ethereum is gaining ground against the largest cryptocurrency.
The ETH/BTC pair is facing resistance at 0.04382 and the August 2024 peak at 0.05019. Traders should pay attention to whether Ethereum will rise further in the short term.
Technical indicators Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) support the bullish theory. The RSI is trending up and showing 57 with no signs of divergence.
The MACD flashes a green histogram bar above the neutral line, coinciding with the underlying positive momentum of the ETH price trend.
ETH/BTC daily price chart
The bullish thesis could be invalidated if Ethereum fails to close above 0.03907. The correction of the pair could result in ETH being sent to recover liquidity between 0.03054 and 0.03524 Fair Value Gap (FVG).
Supply of Ethereum held by whales increases due to decrease in foreign exchange reserves
According to Santiment data, whales have added nearly 7% of ETH tokens to their holdings in the past two weeks (excluding exchange wallets). Over the past week, foreign exchange reserves have fallen 2% from a peak of $10.79 million on Nov. 28 to $10.57 million on Thursday.
When whales increase their holdings of tokens, it is usually seen as a bullish sign and large wallet investors may expect gains on the tokens. The decrease in foreign exchange reserves correlates with a decrease in selling pressure, supporting the theory of an increase in the price of the token.
Supply and price of Ethereum held by whales | Source: Santiment
Ethereum supply and price on exchanges | Source: Santiment
Ethereum price prediction
Ethereum rose to an all-time high of $3,956, inching closer to the $4,000 level, a key psychological barrier for ETH. The altcoin's all-time high was $4,888, and Ethereum is currently trading nearly 25% below its 2021 peak.
Technical indicators RSI and MACD support the rise in Ethereum, with RSI in an uptrend at 65 and MACD indicating positive momentum underlying the ETH price trend.
If Ethereum manages to break above $4,000, it will face a resistance zone that could allow traders to take profits and lead to a correction in ETH price.
According to IntoTheBlock data, 1.23 million wallet addresses purchased 434,130 Ether between $4,030 and $4,145. The In/Out of the Money (IOMAP) metric is used to identify resistance zones where a large number of addresses have purchased tokens, which helps predict price movements.
ETH/USDT daily price chart
If Ethereum corrects, the altcoin could find support at $3,500, and further decline could push ETH into the imbalance zone between $2,722 and $3,014.
Traders should note that the correlation between Ethereum and Bitcoin is 0.81 as of December 5, according to data from Macroaxis.com. If Bitcoin’s price trend reverses, it could have a negative impact on Ethereum and the top 50 altcoins, leading to a correction in the short term.
