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Reasons Ethereum [ETH] traders may witness short-term gains this weekend

Reasons Ethereum [ETH] traders may witness short-term gains this weekend

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Ethereum [ETH], at the time of writing, changed hands for $1,341. On September 22nd, the alt hit a 30% retracement of the September high of $1,789. Far from what many investors expected from the most important month of the year. The bright side was that it was exposed with a steeper discount and flashing signs of a recovery rally.

ETH may not have retested its 2022 bottom, but the 30% decline brought it back to mid-July levels. Another 30% drop is sure to trigger a retest of that YTD low. While another crash was still possible, ETH’s latest performance suggested that a short-term bullish retracement was in the works.

Feeding the oxen

A 30% discount in the last two weeks was big enough to attract a lot of attention and potential accumulation. Outflows from ETH exchanges recorded a significant increase in outflows. This was the largest outflow recorded since mid-June.

Source: Santiment

About 104,000 ETH flew off the exchanges on the 21st-22nd. September This equated to approximately $132 million in buying pressure. In contrast, around 18,000 ETH were deposited on exchanges during the same period. Exchange flows far exceeded the number of inflows, which confirmed the strong rise in demand.

ETH’s 180-day market capitalization realized value (MVRV) declined since September 10, around the same time as the price decline. This confirmed that most people who had ETH at the time, especially those who bought before the merge, have run out. However, the same indicator rose slightly in the last two days.

Source: Santiment

MVRV’s pivot 21.9. confirmed demand growth near current lows. It also reflected higher outflows from the stock exchanges, which was observed in the stock market’s outflow vs. inflow metrics.

ETH’s price development and indicators also confirmed short-term bullish expectations. ETH’s six-hour chart revealed a strong bearish candle towards the end of the September 21 trading session. The pullback pushed the price lower than the previous day. Despite this result, the Relative Strength Index (RSI) recorded a higher low to its lowest high.

Source: TradingView

The above result highlighted the divergence between price and RSI. This is often considered a bullish result and could be a sign that ETH is headed for a bullish weekend.

Additionally, ETH’s on-chain metrics combined with price performance reinforced ETH’s short-term upside potential. Investors should still note that ETH was not yet oversold despite the latest setback. Therefore, there is still a chance to fall below the current level.

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