TL;DR

Despite bleeding out lately, Ethereum continues to show bullish signals. Some analysts see recovery hinging on ETH reclaiming $4,200, while others lean bearish, eyeing a slide to $3,500 unless support holds.

Are the Bulls Coming Back?

Ethereum, which was at the forefront of gains this summer, briefly plunged below $4,000 earlier today (September 25) amid an ongoing red wave passing through the entire crypto market. It later surpassed the psychological level but remains 12% down on a weekly scale.

Despite the negative performance, three crucial factors signal that a resurgence could be on the way. The first one is the diminishing supply of ETH tokens stored on crypto exchanges. CryptoQuants data shows that today the figure has dropped to a nine-year low of around 16.3 million coins. 

This development indicates that many investors have switched from centralized platforms to self-custody solutions, which in turn reduces immediate selling pressure. 

Next in line is Ethereums Relative Strength Index (RSI). The technical analysis tool examines the assets recent price movements to indicate whether it has entered oversold or overbought territory. It ranges from 0 to 100, and readings below 30 suggest that the first scenario could be in play, which can result in a rally. As of press time, the RSI stands at roughly 22.

ETH RSI, Source: CryptoWaves Last but not least, we will touch upon the latest whale activity that may also positively impact ETHs valuation. X user ZYN revealed that ten new wallets have purchased over 200,000 tokens worth more than $800 million in the last 24 hours. 

Such actions reduce the amount of coins available on the open market and could be followed by a price pump (should demand remain constant or rise). Additionally, smaller players may view this as an encouraging sign and join the ecosystem by distributing fresh capital. 

The Analysts Take

According to X user Lennaert Snyder, Ethereums road to recovery goes through a crucial reclaim of $4,200.

Watching that level for confirmation shorts and longs after the gain. Losing $3,900 support brings us to the $3,700 zone, holding that is key to maintain the weekly uptrend, he argued.

The analyst, using the X moniker Ted, leaned more bearish for the short term. He predicted that ETH will most likely retest $3,800, which could result in a further downtrend to $3,500. On the other hand, if it holds this level, a rally will happen.