Ethereum Bull Flag Forms as ETH Positions for Historic ’Uptober’ Rally

Ethereum's chart paints a textbook bull flag pattern just as crypto's favorite month approaches—setting the stage for what could be an explosive October.

The Technical Setup

ETH consolidates in a tight range after recent gains, forming the classic flag pole and pennant that technical analysts dream about. Volume patterns suggest accumulation while shorts get increasingly nervous.

Seasonal Winds at ETH's Back

Historical data doesn't lie—October has consistently delivered outsized returns for digital assets. The 'Uptober' phenomenon combines institutional quarter-end rebalancing with renewed retail interest after summer doldrums.

Network Fundamentals Accelerate

Ethereum's burn mechanism continues destroying ETH at a pace that would make central bankers sweat, while Layer-2 adoption hits new records weekly. The merge continues paying dividends in reduced issuance.

Institutional FOMO Building

Traditional finance finally understands what 'ultrasound money' means—even if they're still figuring out the private keys. Their gradual allocation shifts create a bid wall that retail traders can ride.

Of course, Wall Street will claim they saw it coming all along—right after they finish explaining why they were underweight crypto last quarter. The pattern suggests higher prices ahead, but in crypto, the only guarantee is volatility.

ETH supply on exchange drops to a multi-year low 

On-chain data suggests shifting market dynamics, which could indicate that ETH is on the verge of a major price move. ETH reserves on exchanges have been steadily declining in recent months and are now sitting at a 9-year low. This signals that investors are withdrawing tokens from centralized exchanges, a MOVE often linked to long-term accumulation. According to Glassnode data, over the past three months, investors have accumulated 2.7 million ETH, valued at $11.3 billion. A declining supply paves the way for a strong rally, which could be triggered by rising demand. 

Institutional buyers return  

Institutional demand is showing signs of recovering, with ETH ETFs recording $546.9 million in net inflows on Monday, the strongest level of net inflows in 6 weeks. The rebound in inflows follows five straight days of outflows last week, totaling $795.5 million, the worst week for ETH ETFs since its launch. Should institutional demand persist, this could help ETH climb higher. 

Meanwhile, corporate treasury demand remains robust. BitMine continues its ethereum treasury strategy, increasing its holdings by 234,850 ETH, taking its total holdings to 2.65 million ETH, valued at around $11 billion. 

SWIFT Test adds bullish case 

Beyond exchange data, recent adoption news is adding to the bullish case for ETH. SWIFT, the global payments messaging network, has reportedly stated testing Ethereum’s Linea, a Layer-2 scaling solution. Given that SWIFT connects 11,000 banks globally and processes more than $150 trillion in transactions annually, these reports carry weight, demonstrating that financial institutions are exploring Ethereum technology for practical applications in the traditional financial system. Such integration could fuwl demand for ETH over time. 

Seasonality supports October gains 

Ethereum trades -6% lower across September, aligning with historical averages for a month that is typically weak for Ethereum. According to data from CoinGlass, October and beyond are typically bullish months for ETH, with a return is 8.84%. Furthermore, the data also show that in cases where ETH fell across September, it was followed by gains in October, and on most occasions, these gains were double-digit. However, it's worth noting that past performance is not indicative of future gains. 

ETH technical analysis 

ETH/USDT trades in a potential bull flag bullish continuation pattern. From its record high of 4955, the price trades in a falling channel. Recently, ETH/USDT found support on the 100 EMA, rebounding higher to test the 50 EMA resistance. 

Buyers will look to push the price above the 50 EMA at 4210 to bring 4610, the upper band of the falling channel, into focus. A rise above here is needed to break out of the bull flag pattern and extend gains towards 4750, the September high, and 4955, the record high. 

Failure to rise above the 50 EMA could see ETH retest 4000 and the 100 EMA at 3880. Below here 3550, the 0.5% Fib level comes into focus.