• The fresh purchases by Ethereum whales signify confidence in the token, which was lacking after sell-offs earlier in October.
• There are signs of a positive crossover as indicators support the short-term recovery.  
• ETH is trading around $3,940, but the values of Fibonacci and VWAP have verified that a turnaround in the upward direction might occur. 

Ethereum (ETH) is displaying signs of strength again following a turbulent month. Whales and sharks, as they are commonly called, have started accumulating the token again.

The return of whale activity is causing hope that ETH is in a recovery phase. Price movement is indicating clear alignment with technical indicators.

Whale Confidence Returns

Santiment shows that addresses with 10,000 to 100,000 ETH have bought another over 218,000 ETH within the past week. This is after a huge sell-off this month. Approximately 1.36 million ETH were sold between Oct. 5 and 16.

The statistics indicate that this category of large investors has bought about 16.7% of the ETH tokens they had sold previously. This is regarded as a stabilizing power of the second-largest cryptocurrency. The latest purchases indicate that even top ETH holders believe that the correction has reached the bottom. 

Source: X

Also Read | Ethereum (ETH) Targets $14,000 as Analysts Predict a Repeat of Its 45x Rally

Bullish Momentum Indicators 

GemXBT provided a 1-hour chart of ETH/USDT, showing ETH was trading at approximately $3,921. There is a positive bullish momentum on the short-term moving averages (MA). The 5-day and the 10-day averages have crossed the 20-day MA. The Relative Strength Index (RSI) is approximately 50, which means that ETH is neither overbought nor oversold.

Thus, the price may continue increasing as the market does not have the tendency to revert in the near term. In the meantime, the MACD has not broken the signal line, which demonstrates average bullish behaviour.

However, the histogram shows a lot of weakness in momentum. This indicates that Ethereum may be setting the foundations of another rise, so long as the larger market remains stable.

Source: X

A Support Towards Continued Recovery

The 4-hour TradingView chart displays a number of important levels that suggest that Ethereum is in recovery. The price is now resting around the VWAP of $3,930, which shows that there is no balance between the buyers and sellers at the time of writing.

Fibonacci retracements give additional explanation. Ethereum is currently trading almost at the 0.236 Fib level, which is $3,951.

In case it breaks and remains above this zone, the second target is the 0.382 level around $3,988. However, the price can go even higher to the 0.618 level, around $4,083.

On the downside, there is instant support between $3,924 and $3,900. A decline below these levels would lead to a re-test of the $3,711 zone. However, a continued increase in whale purchases could cause any pullback to be short-lived.

Source: TradingView

Also Read | Ethereum (ETH) Bulls Push for $4,300 Breakout as $3,800 Support Holds Strong