Introduction

Ethereum’s native token, Ether (ETH), has already surged by about 67% in 2024. There are strong signs that this upward trend will continue in June. By looking at on-chain data, fundamental analysis, and technical indicators, we can see why Ethereum might finally break the $4,000 mark. Here are the three key reasons to watch for this price increase.

1. Falling Wedge Breakout

What is a Falling Wedge?

A falling wedge is a bullish reversal pattern in technical analysis. It has two descending and converging trendlines. This pattern usually resolves when the price breaks above the upper trendline. The price then rises by the height of the wedge.

Current Breakout Stage

As of June 1, Ether entered the breakout stage of its falling wedge pattern. On May 20, ETH’s price broke above the wedge’s upper trendline. This breakout happened with a rise in trading volumes, confirming a bias towards reaching the upside target. The target for this pattern is around $4,255 by the end of June. This would be a 12.65% increase from current levels.

Bull Flag Pattern

Interestingly, the ongoing breakout seems to be part of a bull flag pattern. A bull flag is characterized by two parallel, downward-sloping trendlines. When the price breaks above the upper trendline of a bull flag, it usually rises by the height of the previous uptrend. This means ETH could be on its way to $6,000 by late June or early July.

2. Whale Accumulation

Rich Whales Buying Ether

The potential for Ether to reach $4,000 is also boosted by its richest whale investors. According to on-chain data from Santiment, entities holding 10 million to 100 million ETH have increased their holdings by about 0.5% since May 20. This accumulation started when rumors surfaced about the U.S. Securities and Exchange Commission (SEC) reconsidering its stance on spot Ether ETFs.

Impact on ETH Price

This whale accumulation coincided with a 19.25% rise in ETH’s price. The buying continued after the SEC approved spot Ether ETFs on May 23. At the same time, entities holding 1 million to 10 million ETH reduced their holdings, likely taking profits. However, overall Ether reserves across all crypto exchanges have declined sharply. This suggests that investors are withdrawing their ETH from exchanges, indicating a strong hodling sentiment. This behavior supports the potential for Ether’s price to continue rising above $4,000 in June.

3. Potential SEC Approval of Spot Ether ETFs

Analysts’ Predictions

Analysts believe there is a legitimate possibility that U.S. spot Ether (ETH) exchange-traded funds (ETFs) could launch by late June. This optimism follows BlackRock’s decision to update the Form S-1 for its iShares Ethereum Trust (ETHA) with the SEC.

Positive Signs and Predictions

Bloomberg ETF analyst Eric Balchunas commented on May 29 that this is a positive sign and that other approvals might follow soon. He previously predicted that spot Ether ETFs could capture 10-15% of the flows that spot Bitcoin ETFs saw after their launch. Since January, spot Bitcoin ETFs have seen net inflows of $13.85 billion.

Impact on ETH Price

The successful launch of Ether ETFs in June, coupled with significant capital inflows, indicates rising demand for ETH. These factors can push Ether’s price above $4,000 over the next 30 days.

Conclusion

The combination of a falling wedge breakout, whale accumulation, and the potential approval of spot Ether ETFs by the SEC are three strong signs that Ethereum’s price could finally break $4,000 in June. While these indicators are promising, it is essential to remember that all investments carry risk. Always conduct thorough research before making investment decisions.