Can Ethereum (ETH) Break Out Of Its Short-Term Wedge Pattern?

Ethereum (ETH) has concluded January on an overall bearish trend despite high hopes among investors.

But will February bring good tidings especially as price shows signs of a potential wedge pattern breakthrough?

ETH had a $3,286 price tag at press time which was a considerable drawdown from its mid-December pick in which price briefly surged above $4,000.

Interestingly, ETH could be headed for more volatility as price threatens to push out of its 2-month wedge pattern.

ETH bulls attempted a breakout from the wedge pattern during Friday’s trading session.

Price briefly broke above its descending resistance line, which was indicative of a surge in bullish expectations.

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However, the bulls were swiftly canceled and ETH closed the day within the descending resistance line. A sign that momentum was not strong enough to exit the wedge pattern.

Excitement For ETH Brews in The Spot and Derivatives Segments

Although Ethereum (ETH) failed its initial breakout attempt, the fact that there was an attempt indicates brewing interest.

This was evident in both the spot and derivatives markets. For example, volume was up by 70.92% to $54.35 billion in the last 24 hours.

Meanwhile, open interest surged by a modest 1.73% which may not be much but it was still in the green.

This was in line with spot inflows which peaked at $80.35 million on Friday.

ETH net outflows dominated by $45.29 million in the last 24 hours. This sell pressure resurgence explains the cryptocurrency’s struggle to break out of the wedge pattern.

Regardless of the outcome, ETH’s reversion back into the wedge pattern might be short-lived.

This is because price is currently squeezing into the edge of the pattern. So, what should traders look for as price enters this critical range?

A surge in exchange outflows could manifest within the squeeze zone. So far exchange flows have kicked off December with a significant decline.

Exchange outflows were slightly higher at 205,620 ETH, compared to 204,246 ETH at the time of observation.

The higher exchange outflows indicate that demand slightly outweighed sell pressure.

BlackRock Adds to Ethereum (ETH) Bag

Even institutions are starting to perceive ETH to be a good deal at its current price range.

BlackRock, one of the biggest investment firms in the world has reportedly acquired 24,529 ETH worth roughly $83.24 million.

Meanwhile, ETH ETFs also concluded the last 2 days of the year with positive flows.

This could indicate a bias in favor of the bulls especially considering the significant discount that the cryptocurrency has achieved from its December top.

BlackRock buying ETH, exchange outflows being higher than inflows, and a spike in both spot and derivatives inflows underscore positive developments.

This signals the possibility of a bullish start this month. While these findings may boost sentiment, investors should move cautiously due to potential unknown downside risks.