Ethereum Price Prediction: These Two Signals Will Mark the Beginning of ETH’s Next Bull Market

Ethereum (ETH) has risen by an impressive 29% in the past 7 days after the U.S. Securities and Exchange Commission (SEC) proposed a set of new rules called “Regulation Crypto Assets” to support the industry’s growth in the country.

All cryptocurrencies rallied as a result, and bears got squeezed out of their short positions en masse in just three days.

Daily Liquidations on August 18 Were the 8th Largest in History

Data from CoinGlass shows that liquidations spiked to $4.6 billion in the last 3 days, reflecting the magnitude of this short squeeze. August 18 has already been listed as the 8th largest day in terms of liquidations on record, with $3 billion being wiped out of the futures market as a result of this move.

In addition, the U.S. Treasury announced that it will double its buybacks starting on September 9, a move that the market quickly priced in as it injects a significant amount of liquidity into the financial market as a whole and eases conditions.

As a result of these tailwinds, Ethereum effectively broke past two key resistances — the 200-day exponential moving average (EMA) at around $2,200 and a horizontal supply area at $2,400.

We had already flagged a bullish flag pattern that set the stage for such a move just days ago. This is a continuation setup that forms after a pronounced previous move — an uptrend, in this case.

Once the price broke the consolidation rectangle, ETH started to rally. Our target for that move was the $2,400 level, based on the size of the flag’s pole. Now that this price has been hit, we need to reassess the situation to analyze the possible paths that Ethereum could now take following this major breakout.

These Signals Will Confirm the Beginning of a Bull Market for Ethereum

We believe that this bear market is already over and that a bull market for ETH is about to begin, ahead of the implementation of the Glamsterdam update.

The 200-day EMA breakout provides technical evidence of this. However, trading volumes and on-chain data also support this view.

Based on historical patterns, in the last 3 years, every time the MVRV Ratio has crossed above the zero line, a bull market has begun for ETH. We are already quite near that mark at -12%, and that is the first sign that this bearish cycle is about to end.

Moreover, we have also been tracking a second signal related to trading volumes that has also marked the beginning of bull markets in previous instances.

Once the 7-day moving average for volumes crosses above the 30-day MA, that would mean that momentum is rising and the buying pressure has surged to levels not seen in months.

We expect that ETH will rise to at least $5,000 during this cycle once these signals are confirmed, aided by these two macroeconomic tailwinds — positive regulatory developments and higher treasury buybacks.