Important takeouts:
Ether’s chart features a “Power of 3” setup, with price targets exceeding $5,000.
Spot ETH ETF recorded a net influx of 106,000 ether last week, marking seven consecutive weeks of positive influx.
ETH still faces a potential 25% correction, along with a surge in whale exchange inflow rates and disadvantages.
Ether’s (ETH) price chart shows the setup of the textbook “Power of 3” following a trending deviation from $2,100 to $2,200 that took place last Sunday. The move unfolded after the price consolidation period from May 9th to June 20th.
A sudden liquidity sweep pushed ETH to support that many months, but buyers quickly absorbed the decline, pushing prices above $2,500 by Monday.
Ether prepares for the third quarter’s “most hated rally”
The power of the 3 or “AMD” model, short for accumulation, manipulation, and distribution, provides a framework for understanding institutional trading strategies for key liquidity zones.
The accumulation stages, usually marked by a quiet lateral price action, occurred between May 9th and June 20th. At this stage, market participants remain low in volatility and lay the foundation for greater movement.
This is followed by operations, seen in a short breakdown of less than $2,200. Here, price action is trying to force premature sales or short entries only to create panic among retail investors and to reversal violently against the expected movement.
Institutional investors continued to demand as ETH rebounded from $2,200 to $2,500. GlassNode data noted that Spot ETH ETF recorded a net inflow of 106,000 ETH last week, marking a positive trend for the seventh consecutive week. This important capital movement further examines the transition to the final stage of setup.
Currently, there is a distribution phase in progress where ETH begins to move aggressively in the opposite direction of the operating zone. The liquidity pool above is a target and the price often accelerates as the trapped position is unwinded. In the current market, the target for the ether distribution stage is above $5,000, or 100% of the meeting.
The three patterns of power mirror Ether’s 2016-2017 Rally. Newly appointed Bitmine head Thomas Lee highlighted the fractal, suggesting that ETH may be on the “most hated gathering” crisis.
Related: Bitmine raises $250 million to launch Ethereum Corporate Treasury
Ether can face a 25% correction
Conversely, Cointelegraph reported that bearish outlooks could also emerge. Ether is facing a potential 25% decline of $1,600 after breaking years of technical resistance and failing to fall below the lower limit of the multi-year symmetrical triangle on the two-week chart.
At the same time, the massive ETH whales have moved around $237 million worth of ether from staining to exchange, with over 62,000 ETH already entering Binance in five days. This wave of redistribution from large owners to medium wallets suggests increased sales pressure and negative risk for ETH.
Crypto Trader Exitpump is also noting that Ether is struggling to break the $2,500 resistance level and that the current market is shorting up Altcoin. The chart shows that even as ETH prices fell, open interest that was aggregated during the New York trading sessions increased.
Meanwhile, the short-term funding rate has become negative, with spot volumes declining and bear pressures increasing. Currently, immediate liquidity is below current range, so the main drawback targets are between $2,350 and $2,275.
Related: Ethereum risk: Price drops by 25% as “giant whales” move $237 million to the exchange
This article does not include investment advice or recommendations. All investment and trading movements include risk and readers must do their own research when making decisions.
