ETH Market: Opportunities and Challenges in the Supply and Demand Game

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Recently, the market for ETH has been like an intense tug-of-war, with many signals worth digging deeper into, from the fundamentals to the technical aspects.

1. Fundamentals: Supply and demand imbalance creates strong drivers.

The actions of institutions and ETFs have been too intense! Since May 15, the buying volume has reached 2.83 million ETH (approximately $10 billion), directly pushing the supply-demand ratio to 32:1. This means that the buying power far exceeds the new output, and this structural influx of funds is like adding "rocket fuel" to ETH. Bitwise also predicts a net purchase of $2 billion in the next year, and the determination of institutions to accelerate their layout is evident. In the long run, the scarcity of ETH is further amplified.

Looking at the network activity again, 521,000 ETH are queued to exit, while 359,500 ETH are queued to enter. On one side, there are profit-taking activities, and on the other, new funds are coming in. This kind of game is particularly interesting. It indicates that market divergence is increasing, but it also indirectly reflects the liquidity and attractiveness of ETH. After all, a target that can simultaneously attract profit-takers to exit and new funds to enter is inherently appealing.

2. Technical Analysis: Short-term adjustment, long-term bullish.

On the daily chart, the current price of ETH is $3,717.18, with the Bollinger Bands hovering around the upper band at $4,018.14. The RSI is at 73.29, indicating an overbought zone, but the upward momentum hasn't broken (MACD DIF line at 312.42). This suggests that while there may be short-term pullback pressure, the overall trend is still upward.

The hourly level shows adjustment signals, retreating from $3,857.87, with RSI at 25.66 entering the oversold zone, which could lead to a rebound. The support level is $3,543.28; if it can hold within the $3,550 - $3,650 range, we can look upward to $4,000 - $4,200 or even higher. The logic is sound: supply and demand imbalance forming a base, short-term oversold rebound, and long-term institutions and ecosystems (DeFi, NFTs, etc.) driving the bullish trend.

3. Trading Strategy: Gradual Layout, Balanced Offense and Defense

If you want to enter the market in the short term, you can accumulate positions in batches at $3,550 - 3,650, betting on a rebound. The initial target is $4,000 - 4,200, and there is room for extension after breaking the previous high. However, you need to set a stop-loss; if it falls below $3,400, it indicates that support has failed, and you should exit promptly to control risk.

There is no need to panic in the medium to long term; institutions continue to buy in, and the ecosystem keeps developing (the smart contracts and DApps ecosystem of Ethereum are the cornerstones of the crypto world). As long as the overall environment of the crypto market remains good, the structural bull market for ETH is likely to continue. If you hold on, $5,000+ is not impossible.

However, we must also be cautious of risks. If the macro environment changes (for example, a major adjustment in the Federal Reserve's policies), or if a large number of validators exit, it could trigger selling pressure and lead to a market correction. But as long as we manage our positions well and operate in batches on platforms like Gate, seizing the supply and demand dividends of ETH and technical rebounds, the opportunities still outweigh the risks.