Ethereum Price Targets $3.7K on Rising ‘Smart Money’ Interest

Ether (ETH) has seen impressive growth over the past two weeks, gaining 30% between November 4 and 19. This surge pushed ETH above the $3,000 mark for the first time since August 2, 2023. While the rally has slowed slightly in recent days, on-chain data and technical indicators suggest that further upside for ETH is still possible.

Increasing Network Activity Drives Ethereum’s Price Surge

The recent bullish movement in ETH has been supported by a noticeable uptick in network activity, including a rise in both daily active users and transaction counts. According to Glassnode, the number of daily active addresses (DAAs) on Ethereum grew from 377,065 on October 27 to 487,941 by November 19. This reflects a broader trend of growing engagement across the Ethereum ecosystem, including Layer-2 solutions like Polygon, Arbitrum, Optimism, and others.

Transaction volumes have also surged, with daily Ethereum transactions reaching 1.29 million on November 15, up from 962,160 on October 27. This increase points to not just active trading, but also greater adoption of decentralized applications (dApps), including decentralized finance (DeFi), gaming, and more. The total value locked (TVL) in Ethereum-based protocols has grown by 25% since November 5, further supporting the bullish case for Ether.

Smart Money Sentiment Signals Confidence

One key indicator of Ether's continued strength is the growing positive sentiment from "smart money" investors—wealthy individuals and entities with significant experience in cryptocurrency markets. Market Prophit data shows that while general retail sentiment towards ETH remains modest, with a score of just 0.06 (on a scale from -5 to +5), smart money sentiment is much more optimistic, with a score of 2.28. This high level of confidence among institutional and whale investors suggests that ETH may continue its upward trajectory in the near term.

Technical Outlook: U-Shaped Pattern Points to $3.7K

ETH's price action has formed a U-shaped recovery pattern on the four-hour chart. If ETH maintains its position within this formation, it could target the $3,376 level, which marks the neckline of the pattern. A sustained breakout above this level could see ETH reaching the bullish target of $3,735, representing a more than 20% gain from its current price.

On the downside, a retreat from the $3,100 level could lead to a retest of the U-shaped bottom near $3,000. This level is seen as a strong support zone, as around 3.1 million ETH was previously purchased by 3 million addresses at this price point, according to IntoTheBlock data.

Additionally, ETH faces significant resistance at the $3,200 level, where roughly 6.1 million ETH was acquired by 4.25 million addresses. Overcoming this resistance will be critical for ETH to complete its U-shaped recovery and continue its bullish momentum.

In conclusion, while ETH’s rally has slowed, key indicators suggest further upside potential, with a price target of $3,700 if the U-shaped pattern plays out and smart money sentiment remains strong.