- Ethereum’s exchange reserves have plummeted from $78 billion to $52 Billion, creating a bullish outlook for its price.
- Analysts predicted the Ethereum price could reach $8,540 if it maintains key support levels.
- Technical indicators showed a potential reversal as the RSI approaches oversold territory and money flow increases.
Ethereum price (ETH) has been experiencing a slump for some time now. This was largely influenced by President Trump’s recent decision to impose new tariffs on China, Canada, and Mexico.
This move has instilled fear within the business and trading communities, leading to a significant liquidation event on February 3rd. As a result, many tokens across the ecosystem, including ETH, saw substantial price drops, with the Ethereum price falling to $2,170.
This sharp decline left many investors worried about the market’s future. However, a shift in sentiment occurred when President Trump announced a temporary suspension of trade tariffs on Canada and Mexico.
He also signed an executive order to establish a sovereign wealth fund to strengthen the U.S. economy. These developments helped restore confidence in the financial markets, allowing Bitcoin (BTC), Ethereum (ETH), XRP, and other altcoins to recover.
Amidst this backdrop, Ethereum crypto has shown signs of resilience. After the dust settled, ETH began to regain momentum. Currently, it is trading at $2,721, reflecting a 1.33% increase in intraday trading.
Additionally, analysts hint that if Ethereum crypto can break through key resistance levels, it may trigger a larger rally. With this, the long-term targets potentially reach as high as $8,540.
Exchange Reserves Fell Drastically & Analysts Are Bullish On Ethereum Price
On February 3rd and 4th, 2025, U.S. ETFs focused on Ethereum saw unprecedented trading volumes. During this period, the data revealed net inflows of $84 million and $307 million into Ethereum ETFs, respectively.
This surge in ETF activity coincided with a selloff that temporarily drove the Ethereum price down to $2,150. However, it quickly rebounded.
However, the following days, February 5th and 6th saw a significant drop in inflows. This fell to $18.11 million and $10.65 Million, respectively. Despite this decline, Ethereum ETF data has remained positive throughout February 2024, contrasting with Bitcoin ETF trends.
Moreover, data from CryptoQuant indicates that Ethereum’s exchange reserves have been plummeting since the start of 2025.
From a peak of $78 billion in late December 2024, reserves have dipped to $52 Billion. This indicated that they may continue to fall. This trend created a bullish scenario for the Ethereum price.
Market analysts are also optimistic about Ethereum’s future. TedPillows has noted a recurring cycle in the Ethereum price movements. This further highlighted that ETH has only experienced one capitulation candle in Q1 2024, Q3 2024, and Q1 2025.
The Ethereum price hit its lowest point in the previous two instances and surged by 90-100% within 8-12 weeks. He believes the Ethereum crypto is currently positioning itself for another upward move. He further stated that it is set to “melt faces” as bullish momentum builds.
Similarly, analyst JavonTM1 argued that Ethereum remains in an uptrend. There is also a potential for bulls to push the price to $8,540, provided key support levels are maintained. The first target was $4,811.71, representing a 75% increase from current levels.
JavonTM1 points out that ETH has already breached significant structural resistance levels. This enhanced the likelihood of continued upward momentum. If the Ethereum price surpasses the $4,811 mark, it could reach $8,540, representing a staggering 210% increase.
Technical Indicators In Ethereum Price
The EMA bands show a distinctly bearish trend, as the Ethereum price is positioned below all significant bands. However, it rests near a critical support block that previously acted as resistance during the November 2024 rally.
The RSI for Ethereum stands at 34.62, indicating that the asset has cooled off and is approaching oversold territory. If Ethereum remains at this level for a few more days, it could signal a potential reversal. A rise in the RSI above 50 would suggest a return of buyers and a possible shift in the trend.
Similarly, both the MACD and AO are currently in a bearish state. However, the MACD histogram shows that the bearish momentum is gradually fading.
This hinted at a potential weakening of negative pressure. A bullish crossover in the MACD could further reinforce a positive directional movement.
Additionally, the CMF indicated that money flow is rising, having surged above the zero line to reach 0.07. This uptick suggested increasing buying interest. This could support a bullish move for the price of Ethereum shortly.
Disclaimer
In this article, the views, and opinions stated by the author, or any people named are for informational purposes only, and they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of financial loss.
Varuni has been in the web3 space for half a decade, witnessing the changing dynamics of DLT, Blockchain and Web3. With 8 years of journalistic expertise, she has a keen interest in emerging technology and their impact on society. She has published news and on-chain analysis articles on Nasdaq as well as some of the top web3, crypto news firms. Currently, she heads The Coin Republic as the Editor-In-Chief.