After suffering sustained low demand from institutional investors recently, Ethereum’s (ETH) price continued with bearish sentiment last week. The top-tier altcoin had its lowest weekly close since early February of about $2,294. However, the bearish momentum is expected to significantly decline in the near term after almost retesting the August 5 lows.
Moreover, the anticipated economic shift in the United States amid the upcoming general elections will likely increase crypto liquidity in the subsequent months. Additionally, Bitcoin’s dominance is on the cusp of a macro reversal, which will accelerate the rate of crypto cash rotation to altcoins.
Ethereum Whales Losses Appetite
According to on-chain data analysis provided by Glassnode, Ethereum whales drastically reduced their accumulation rate in early July and have since been taking profits. For instance, the US-based spot Ether ETFs have only registered one weekly net cash inflow since the historic approval in July.
In total, the US spot Ether ETFs, led by Grayscale’s ETHE, have registered a net cash outflow of about $568 million.
Meanwhile, on-chain data shows more Ether whales have accelerated their selling pressure, even at a loss.
Rising Network Activity
Despite the heightened bearish sentiment, the Ethereum ecosystem has registered significant growth in the recent past. According to on-chain data analysis conducted by Santiment, the Ethereum ecosystem reached a four-month peak in network growth, suggesting a potential bullish rebound ahead.
On Sunday, the Ethereum welcomed over 126k new wallets. The. Ethereum network is heavily bolstered by its rollups, which helps to seamlessly onboard more users in specific niches including gaming and real-world assets tokenization.
Midterm Price Expectations
From a technical standpoint, Ether’s price is likely to retest the support level around $2,163 in the near term again before rebounding towards its all-time high. However, a consistent close below the established support rising trendline in the past year will result in further bearish sentiment in the coming months potentially below $2k.
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