Ethereum's Relief Rally: 13% Weekly Gain, Whale Accumulation Drives Recovery

Ethereum has exhibited signs of recovery following its recent decline below $1,400, but it is premature to declare a definitive trend reversal. The cryptocurrency's recent rally is more accurately described as a "relief rally" rather than a confirmed bullish trend. This resurgence is attributed to quiet whale accumulation, which has helped Ethereum regain some of its lost ground. However, the lack of a strong bid-side push indicates that the risk of further capitulation has not been entirely eliminated. In summary, while Ethereum is showing signs of life, it is not yet ready for a sustained upward movement.

Early indicators of recovery are becoming apparent. Although the bulls have not yet fully charged, they are clearly preparing for action. A closer examination of the monthly and weekly price charts reveals a nuanced picture. While Ethereum is in the red for the month, Bitcoin has shown a solid 13% gain. However, on a weekly basis, Ethereum is outperforming Bitcoin, with double the gains. This suggests a rotation of capital back into Ethereum, particularly as Bitcoin approaches a key overhead supply zone at $96k, where resistance may limit further upside.

Technical indicators support this analysis. The Relative Strength Index (RSI) on the ETH/BTC daily chart is trending upwards after spending much of April in oversold territory, signaling a potential shift in momentum. This technical data aligns with the observation of significant whale accumulation, making a breakout above the $1,900 resistance level increasingly plausible.

The bullish outlook for Ethereum has been further bolstered by recent data. According to Glassnode, there has been a sharp increase in First Buyers, indicating that new wallets are acquiring Ethereum for the first time since February. Additionally, Momentum Buyers, who are short-term traders entering during rallies, have intensified their activity this week. When these two groups collaborate, it often precedes a structural reversal in the market. However, caution remains warranted. Ethereum's inability to bounce back aggressively suggests that the risk of capitulation still lingers. Until fresh buyers step in at the critical $1,900 level, overcoming this resistance will be challenging.

While on-chain data and capital rotation hint at a potential relief rally towards $1,900, sell-side pressure is likely to maintain a tight grip on this level. Monitoring volume metrics around $1,900 will be crucial, as it could serve as the tipping point for Ethereum's next significant move.