ethereum price rallied on Tuesday, August 6 after forming a large hammer candlestick pattern and some investors, including ‘7 Siblings’, bought the dip.
Ether (eth) was trading at $2,445, up 15% from its lowest point this week. This price action was in sync with that of bitcoin (btc), Cardano (ADA), and Bittensor (TAO).
ethereum whales are buying
There are indications that some large investors bought into the Black Monday crash, hoping the token would recover. One of the buyers was an entity known as '7 Siblings', which has over $1.57 billion in assets. 7 Siblings purchased 56,093 eth tokens worth over $129 million.
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There are also signs that investors in exchange-traded funds bought the dip. According to bitcoin–btc-claws-back-from-steep-losses-as-crypto-traders-buy-dip?srnd=phx-crypto” target=”_blank” rel=””>BloombergThese investors bought assets worth $49 million, in a sign of increased investor optimism.
Still, the cryptocurrency industry is cautious and some large holders are selling their tokens. Jump Trading, a prominent player in the industry, has sold Ether tokens are worth over $609 million in the past few weeks. Another major holder known as Longling Capital x.com/lookonchain/status/1820645376132886549″ target=”_blank” rel=””>moved 20,000 coins after being inactive for almost 2 years.
ethereum’s rally faces additional risks. For one, not all analysts believe the Federal Reserve should cut interest rates in September. In an interview with CNBC, Komal Sri-Kumar, founder of Sri Kumar Global Strategies, said the Fed should wait for inflation to decline before cutting interest rates.
Still, it seems to be in the minority, as the CME Fedwatch Tool has a 76.5% chance of a 50-basis-point rate cut in September, followed by another in November and December.
Another positive for ethereum is that its staking yield has increased by 6.3% over the past 24 hours to 9.46%. This rally occurred as staking ethereum-2-0″ target=”_blank” rel=””>Market capitalization fell by 26% to $81.95 billion.
ethereum price has some technical risks
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The other potential risk for Ether is technical. On the daily chart, the coin formed a triple top pattern whose neckline was at $2,810. It has now fallen below this neckline, meaning that the bears have prevailed.
Ether is also on the verge of forming a death cross, as the 50-day and 200-day simple moving averages are on the verge of making a bearish crossover. Also, as noted above about bitcoin, any bounce after a sell-off could turn out to be a dead cat bounce.
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