Ethereum price has been under pressure recently. The stock fell to $2,387 amid widespread market declines on speculation about regulatory oversight of Tether.
However, technical indicators and on-chain data indicate that Ethereum may be poised for a reversal. Sentiment about the near-term future is improving.
TD Sequential Gift Buy Signal
The TD Sequential indicator on the Ethereum 12-hour chart is also suggesting a buy signal, which is also a positive sign. Technical analysis of the bearish trend predicts a rebound to $2,665 if the $2,412 support level holds.
This move is consistent with broader market trends observed in recent days. Volatility is increasing as Ethereum price attempts to recover from the drop experienced on Friday.
However, while analysts remain optimistic about Ethereum's future, some warn that a break below the $2,000 level could spell trouble for the current bull market. At the time of writing, the stock is still trading above a key support level, so a sharp rally is not completely ruled out.
Whale activity surges to six-week high
Contributing to a possible pullback, Santiment on-chain data reveals that large transactions on the Ethereum network have reached a six-week high. Since the recent price drop, large holders, who are said to typically hold more than $100,000, have been accumulating Ether.
This shows that they believe in future price increases. This increase in whale activity coincided with a record number of new wallets being created on the Ethereum network.
On October 26th, 6,428 new wallets were created. This is the highest daily increase since September 5th. This means that both current and potential market participants are taking advantage of the recent price drop to purchase Ethereum at lower prices.
Nevertheless, large investors should note that the increase in the number of current whales does not necessarily have a direct impact on prices. However, the cumulative trend shows that large investors are still confident even though currency prices have fallen recently.
At the same time, several technical analysts expressed bullish views on Ethereum, with the expectation that Ethereum will recover if market structure holds. A price analysis shared by TradingView user Basictradingtv paints a positive picture, with analysts expecting it to jump 60% to $4,000 in the medium term.
This prediction is based on the premise that Ethereum will completely retest the previous bullish trend and open up a significant upside potential. However, analysts believe that a drop in Ether price below $2,000 would be fatal to the bullish structure.
Ethereum’s future depends on network upgrades
Besides price, the future of Ethereum still revolves around the ongoing development of the Ethereum network, especially its upcoming “purge”.
Vitalik Buterin has revealed details of the purge. This is an important upgrade that helps reduce blockchain data storage needs.
This upgrade accommodates Ethereum's growing storage needs and should improve the network's scalability over time. Purge simplifies the process of operating Ethereum nodes for all participants while maintaining the security level of the network through steps that erase data and delete history within the network.
Buterin also pointed to the possibility of a “stateless” model. This will further reduce Ethereum’s storage demands and make the network sustainable into the future.
These network upgrades may not have an immediate impact on price, but they are essential to maintaining Ethereum's long-term scalability and attractiveness to both developers and investors.
