3 Potential Bullish Catalysts for Ethereum Price in June

3 Potential Bullish Catalysts for Ethereum Price in June

A confluence of technical and fundamental indicators suggests that Ether could maintain its monthly bullish outlook despite the latest price correction.

As of June 1, Ether (ETH) has dipped more than 40% after establishing a record high of $4,384 in May.

The major move downhill for the world's second-largest cryptocurrency by market capitalization has prompted many analysts to predict additional declines. For instance, Clem Chambers, chief executive of financial analytics portal ADVFN, sees the recent ETH/USD plunge as reminiscent of the beginning of 2018's crypto crash that preceded a 24,000%-plus bull run.

Ether surged more than 4,500% after bottoming out in March before it wiped off almost 60% of those gains in just two weeks of trading in May. Chambers noted that the ETH/USD exchange rate remained at risk of declining lower, adding that it might take "three and a half years’ time" for the pair to reclaim its all-time high.

Akash Girimath, financial correspondent at FXStreet, also noted the ETH/USD exchange rate could fall to $1,200, citing Santiment's 365-day Market Value to Realized Value (MVRV) model. The index measures the profit/loss status of investors who have purchased ETH in the past 12 months.

But amid the pessimistic scenarios, there also emerged narratives that supported the prospects of an early Ether price recovery.

Major network upgrade in July

Investors still have a month to adjust their bias toward Ethereum as the blockchain project prepares for a major network upgrade that is expected to come in July.

Dubbed Ethereum Improvement Proposal 1559, or EIP-1559, the update is anticipated to do away with the Ethereum network's major issue: higher transaction fees. It would do so by replacing Ethereum's "first-price-action" fee model with a base network fee that would fluctuate based on network demand.

Decreasing amount of Ether on exchanges

Recent Glassnode data shows that ETH continues to flow out of cryptocurrency exchanges even after its 40% price crash.

The "Ethereum: Balance on Exchange — All Exchanges" metric shows that ETH reserves held across trading platforms' hot wallets dropped from 13.9 million on May 1 to 13.1 million on May 31 — a 5.75% drop.

Technical structure breakout

At least two independent analysts see Ether prices resuming their bull trend based on technical setups.

PostyXBT envisions ETH/USD trading inside an ascending triangle pattern, the first concrete structure that formed after the pair's correction from $4,384 to $3,590.

Generally, the triangle pattern surfaces during a bearish correction, and it could result in a continuation breakout move to the downside. Nevertheless, PostyXBT expects the price to maintain the triangle support while targeting its resistance trendline for a bullish breakout move.

Created on 11th Jun 2021