Ethereum Price Rebounds 12% as Spot Outflows Cool

Ethereum (ETH) price has shown signs of a potential bullish rebound this week, following a period of cooling sell pressure as it approaches the Relative Strength Index (RSI) mid-level. The cryptocurrency experienced a surge to $2,880 last week, but subsequently cooled down by nearly 12% to $2,522 at press time. The bearish momentum that prevailed in the second half of the week appeared to be subsiding, particularly evident in its spot flows.

ETH spot outflows, which surged above $262 million on Friday, have since cooled down to $13.5 million in the last 24 hours. This decline in spot outflows was accompanied by a similar trend in exchange flows, with Ethereum exchange inflows and outflows cooling down drastically during the weekend. Exchange outflows slightly outpaced inflows, signaling that demand was attempting a comeback after the recent dip. This outcome was noteworthy as the price recently tanked to the RSI’s 50% level, where it was likely to bounce back.

ETH price action has been moving within a narrow range over the last four weeks, with its recent pullback resulting in a retest of the lower range. This observation, along with recent on-chain data, suggests that ETH could kick off the week with another bullish bounce. On-chain analysis revealed that one whale transferred 8,500 ETH, worth about $21.5 million, from Bitget exchange to a private wallet. This large whale purchase could signal that investors were buying the dip, and liquidations in the derivatives segment also cooled down, especially after Friday’s massive shakedown.

While ETH could be on the verge of another recovery rally this week, the possibility of that happening depends on various factors, including recent geopolitical tensions coming out of the Middle East, which have been threatening investor confidence. These geopolitical factors may have influenced the cool down last week and could continue to dampen market sentiment as long as they remain active. Ethereum's weekly price action has been ranging for the last five weeks, signaling a lack of directional confidence. This ranging performance suggests that ETH price could potentially experience a massive directional spike once it picks a side, resulting in either a strong bullish move with the prospects of price pushing above $3,000, or a massive pullback that may push price towards the $2,000 level.

Unfortunately, the geopolitical factors are highly unpredictable. However, if President Trump expresses interest in bringing peace between the two sides, then the markets could potentially gear up for a strong comeback. In the event of further escalation, the opposite could also be true. As far as sentiment was concerned, Ethereum slid into fear territory on Saturday, during which it dropped to 37. This marked the first time in weeks that the sentiment shifted after a sustained lengthy period in greed. Ethereum sentiment also recovered slightly in the last 24 hours, during which it pushed into neutral sentiment. This outcome signaled that investors were expecting further recovery. However, it is worth noting that sentiment could still decline further depending on both internal and external market factors.