Ether could be nearing a price breakout based on its current valuation combined with improving macroeconomic conditions following the summer slump in crypto markets.

Ether ( ETH ) could be near its local price bottom, following an over five-month downtrend that started at the end of March.

Based on a key technical chart pattern, Ether could be set to break this downtrend, according to crypto analyst and entrepreneur Michaël van de Poppe, who wrote in a Sept. 9 X post:

“The bullish divergence is still valid and a higher low has been made. The downtrend of the past months is likely going to be broken upwards. That could be a significant push for the entire market.”
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ETH/BTC, 12-hour chart, bullish divergence. Source: Michaël van de Poppe

A bullish divergence is a technical formation used by traders to identify a strengthening in market momentum following lower lows. The indicator is associated with price reversals from downtrends and suggests that Ether’s price could break out against Bitcoin ( BTC ).

Related: Arthur Hayes predicts Bitcoin rally after closing short position

Ether whales are re-emerging after the summer crypto market slump

Following the summer illiquidity in crypto markets, whales (large Ether holding entities) are reemerging.

A savvy whale bought 5,000 ETH worth over $11.4 million in the past two days, according to a Sept. 9 X post by onchain intelligence firm Lookonchain:

“The whale bought 5,200 $ETH at an average price of $1,322 in November 2022. Then sold it at an average price of $2,093 in January, December 2023, and January 2024, making more than $4M!”
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Savvy Ether whale purchases. Source: Lookonchain

Whales can significantly impact a cryptocurrency’s price action due to the high amount of market-moving capital. Traders often follow whale selling patterns for cues on a cryptocurrency’s short-term price trajectory.

Related: El Salvador marks 3 years of Bitcoin adoption with $31M profit

Ether price remains in an over five-month downtrend despite ETH ETFs

Ether price has continuously declined since the end of March despite the historical debut of the first US Ether-based exchange-traded funds (ETFs).

Ether price fell over 32% since the US Ether ETFs debuted for trading on July 23 , when ETH was trading above $3,400.

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ETH/USD, 1-year chart. Source: Cointelegraph

This is partly because of the continuous negative outflows since the ETH ETFs recorded over $568 million in cumulative net outflows since launch, according to Farside Investors data.

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Ethereum ETF Flow (USD, million). Source: Farside Investors

Investors anticipated a significant price increase from the launch of the Ether ETFs. For Bitcoin, ETFs accounted for about 75% of new investment in the cryptocurrency by Feb. 15 as it surpassed the $50,000 mark.

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