Ether (ETH) is exhibiting strong bullish signals as it consolidates near its all-time high. A confirmed technical pattern suggests a potential 34% surge, while on-chain data reveals a historic drop in exchange supply, pointing to a significant accumulation phase by long-term investors.
The Bull Flag Points to Lofty Targets
After a powerful rally of over 126% from its June lows, Ether’s price has formed a “bull flag” on its daily chart. This classic technical pattern, which occurs after a significant price increase followed by a period of consolidation, suggests that the uptrend is likely to continue. The breakout from this pattern was confirmed when ETH surpassed the upper boundary at $3,770.
The measured move of this bull flag projects a target of approximately $6,100, representing a 34% increase from its current levels. As noted by trader Mister Crypto, the validation of this “textbook bull flag” has set a clear target for the bulls at $6,000. While a key resistance level remains at $4,700, a decisive move above this could trigger the next leg of the rally. It is worth noting, however, that the success rate of a bullish pennant is approximately 54%, making it one of the less reliable chart patterns.
Despite this, the market sentiment remains highly optimistic. Driven by increasing institutional demand through spot Ethereum ETFs and corporate treasury accumulation, some analysts have put forward even more ambitious long-term price targets, ranging from $12,000 to as high as $30,000. Standard Chartered, for instance, revised its forecast for ETH to $7,500, citing record ETF inflows and aggressive buying from corporate treasuries.
A Historic Supply Squeeze
Adding fuel to the bullish fire is a dramatic reduction in the amount of Ether available on cryptocurrency exchanges. The percentage of ETH supply held on exchanges has fallen to just 12.36%, a level not seen since July 2016, according to data from Glassnode. This continued decline in exchange reserves suggests a powerful “supply shock” is underway, where strong demand meets dwindling available supply.
Popular analyst Merlijn The Trader highlighted that only 18.5 million ETH remain on exchanges, attributing the scarcity to aggressive buying by ETF issuers and corporate treasuries. This sentiment is echoed by on-chain data showing that an average of 40,000 ETH per day has been withdrawn from exchanges over the past month. Furthermore, significant whale activity has been observed, with over $250 million in ETH recently moved off exchanges, indicating a strong intention to hold for the long term.
This scarcity is compounded by the fact that over 35.7 million ETH, representing 30% of the total supply, is currently staked in various protocols. This combination of heavy staking and continuous withdrawals from exchanges signals strong holder conviction and significantly reduces the immediate sell-side pressure on the market. The resulting “supply squeeze” creates a fertile ground for a significant price rally as buyers compete for a shrinking pool of available Ether.
