In a significant week for Ethereum (ETH), the cryptocurrency has surged by nearly 10%, buoyed by improving market sentiment and a revival in investor interest. This uptick comes amidst a wider return of risk appetite across the crypto market, with many analysts suggesting that ETH may be on the cusp of a breakout toward the coveted $5,000 mark.
One of the driving factors behind this recent price movement is the notable decline in Ethereum’s Exchange Supply Ratio (ESR), which has hit its lowest level of the year at 0.14, according to data from CryptoQuant. The ESR measures the percentage of ETH’s circulating supply held on centralized exchanges; a higher ratio typically indicates a greater risk of selling pressure, while a lower ratio suggests that more coins are being moved off exchanges into private wallets or custodial services. This recent drop hints at a strategic shift among holders, reducing the immediate availability of ETH for sale and potentially setting the stage for a prolonged rally.
Historically, such declines in exchange balances have often foreshadowed bullish trends, further bolstering the optimism that ETH could soon approach the $5,000 threshold. Compounding this optimism, there are early signs of a resurgence in institutional interest in Ethereum. Spot Ethereum exchange-traded funds (ETFs), which previously faced significant outflows, have recently experienced a notable rebound. Between September 8 and September 12, these ETFs saw capital inflows totaling $638 million, a sharp turnaround from the $788 million that was withdrawn the week prior. This shift is seen as a positive indicator, suggesting that key investors are once again looking to re-enter the ETH market, reinforcing the possibility of a push toward the $5,000 level.
On technical analysis, ETH has established a new support floor at $4,664. If the cryptocurrency can maintain strength above this level, it may pave the way for a retest of its all-time high of $4,957. A successful breakout above that threshold could trigger further gains, pushing ETH closer to the $5,000 milestone that many investors are eagerly anticipating.
However, sustaining this bullish outlook depends heavily on ETH holding above the $4,664 support. Should it fail to maintain this level, the cryptocurrency could face renewed selling pressure, with market analysts identifying the next significant support level around $4,211. As market sentiment continues to evolve, traders and investors will be closely monitoring these key price levels in the days ahead, eager to see if Ethereum can capitalize on its current momentum.
