Ethereum has demonstrated significant resilience, recently surpassing the $3,260 mark and achieving over an 8% increase over the past week. This notable rebound is one of the most substantial observed in recent weeks, fueled by positive technical indicators, renewed interest from exchange-traded funds (ETFs), and increasing expectations of a supply squeeze on trading platforms.
The surge follows an extended period of price consolidation, characterized by lesser demand and repeated attempts to breach resistance levels. The latest upward movement is evident across various technical indicators, which indicate a strong buy sentiment. One-day analyses of oscillators and moving averages reflect a consensus favoring upward continuation.
Ethereum”s four-hour relative strength index (RSI) has bounced back from oversold conditions and is now situated near its upper range, indicating robust buying activity without showing signs of market exhaustion. Additionally, the moving average convergence divergence (MACD) has shifted into positive territory, contributing to fresh bullish momentum after a series of weeks marked by sideways price action, thus reinforcing the overall optimistic market sentiment.
Derivatives positioning has played a crucial role in this breakout. In the last 24 hours alone, over $69 million in ETH positions were liquidated, with short sellers suffering the brunt of the losses. Approximately $56 million worth of short positions were closed, compared to less than $13 million in long positions, compelling bearish traders to repurchase ETH aggressively, which further accelerated the price increase.
A pivotal factor behind this rally has been the revival in spot Ethereum ETF inflows. Data indicates that after two days of outflows, institutional demand returned on December 8, with total inflows turning positive once again. This shift suggests that investors are re-entering the market assertively, coinciding with the price surge and supporting the notion that investor sentiment surrounding ETH is stabilizing.
Furthermore, fund flow trends indicate a deeper narrative within the ecosystem. While certain issuers experienced modest activity, the overall trend suggests that investors are engaging in buying on dips rather than liquidating their positions—this behavior typically aligns with bullish continuation phases.
Analysts are increasingly emphasizing the narrative of tightening exchange balances. Market commentator Crypto Rover pointed out that the ETH holdings on centralized exchanges are on a downward trajectory, signifying a decrease in the number of tokens available for trading. This “supply shock” narrative is gaining traction on social media, with data showing that the reserves of ETH controlled by exchanges are dwindling while demand indicators are on the rise. A diminishing liquid supply combined with increasing bid-side interest often heightens volatility positively, and current market behaviors appear to reflect this theory.
The market structure for Ethereum remains constructive, as the price charts indicate a series of higher lows despite the prevailing uncertainty in the broader market. The recent breakout reinforces this pattern and positions the asset to challenge higher resistance thresholds if demand continues. Analysts are closely monitoring the $3,300 to $3,400 range as a psychological barrier where momentum may encounter challenges, while $3,000 now serves as a short-term support level.
Traders speculate that Ethereum”s performance could further improve as liquidity shifts from Bitcoin ETFs toward yield-generating smart contracts and platforms aligned with tokenization. For the time being, the combination of technical strength, renewed institutional involvement, and tightening supply dynamics positions Ethereum as a standout performer among large-cap cryptocurrencies as December unfolds.
The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Always conduct thorough research and consult with a licensed financial advisor before making any investment decisions.
