Ethereum’s 3-week chop, explained – Are signs pointing to a bull run?

Key Takeaways

Is Ethereum capitulating or consolidating?

Ethereum remains range-bound near key resistance, but on-chain data shows holders are holding firm.

What’s driving ETH’s floor strength?

Despite ETF outflows, LTHs are accumulating, and exchange reserves keep dropping, tightening supply and reinforcing bullish undercurrents.

Is Ethereum [ETH] capitulating or just consolidating?

Adding to this, the % of ETH supply in profit has fallen from 99% to 80%. That means around 20% of the supply has shifted into loss, showing that more holders are now underwater compared to earlier in the month.

Source: Glassnode

In short, HODLer patience is being tested. 

From a psychological angle, tightening profit margins and fading momentum could set the stage for a shakeout.

Notably, the ETH Buy/Sell Pressure Delta has turned negative for the first time since Q2, hinting that sellers are starting to take control.

Given this setup, whether ETH’s $3,900 level can hold as a firm base remains unclear. Ultimately, the focus now shifts to identifying whether Ethereum is consolidating or slipping into early-stage capitulation.

Ethereum’s bull case hinges on HODLer conviction

The strength of Ethereum’s floor largely depends on investor conviction.

At the institutional level, momentum still hasn’t confirmed a bottom.

Spot ETH ETFs continue to bleed capital, recording $81 million in outflows after just two days of inflows, reinforcing the current volatility among investors.

On the other hand, roughly 200,000 ETH, worth around $780 million, have been withdrawn from exchanges in the past 48 hours. This signals potential accumulation, as LTHs appear to be moving assets off exchanges.

Source: Santiment

At a broader level, Ethereum’s total exchange reserves have declined by 4 billion to 61 billion, reinforcing the trend of tightening liquid supply as more ETH leaves exchange wallets and shifts into long-term holding.

Meanwhile, underwater holders haven’t shown signs of capitulation, suggesting that FOMO still anchors sentiment at current price levels. In this light, ETH’s sideways chop looks more like base-building than weakness.

Simply put, weak hands are still shaking out, but the HOLDer’s conviction stays firm. This indicates that Ethereum’s on-chain structure remains bullish, making ETH’s 6.6% monthly “dip” look like a healthy correction.