Ethereum's native asset, Ether (ETH), dropped after reclaiming its two-month loftier in the previous session, suggesting that its recent bullish rally was nearing exhaustion.

In detail, the ETH/USD pair topped out at $ii,699 on Sunday for the start time since June 7. The pair'south meridian level too pushed its relative strength alphabetize (RSI), a momentum-gauging indicator, above 70 — a mark that analysts consider overbought.

Seemingly, traders with short-term chance setups sold the Ether top to secure acting profits, leading up to a modest downside correction.

Ether eyes a run-up toward $3.25K based on a Falling Wedge breakout setup. Source: TradingView

On Monday, Ether prices rose ane.81% to $ii,600 to kickoff the Sunday sell-off risks.

The upswing indicated that traders could yet identify higher bids for the cryptocurrency, especially in the days leading up to the Ethereum's London hard fork upgrade that would — for the first fourth dimension — bring deflationary features to the project's economic system via a new base of operations-fee burning mechanism.

Greg Waisman, co-founder and chief operation officeholder of payment network Mercuryo, noted that Ether's prices could easily cross above $3,000 later the hard fork, given it would bring a "more flexible and cheaper fee structure" to the Ethereum network, boosting adoption. The analyst told Cointelegraph:

"The hype buildup with respect to the forthcoming London hard fork is not reflective of the current price trend. [...] Ethereum is currently seeing a retracement; information technology confirms that the sellers are deliberately lowering the price for a post-upgrade price pump."

That bullish trio

At to the lowest degree iii on-chain indicators tracking Ether flows in and out of defended addresses foresee an extending upside setup.

Spotted on CryptoQuant, the iii metrics involved tracking Ether reserves across all exchanges and their outflow from trading platforms, besides every bit the volume of ETH tokens being deposited to Ethereum 2.0 smart contract.

Related: Traders forecast $3K Ethereum price but derivatives data suggests otherwise

The CryptoQuant data showed that the total Ether reserves on exchanges declined, indicating that fewer traders are interested in exchanging ETH for other assets. Meanwhile, the ETH outflow from those exchanges spiked, illustrating traders' intention to hold their Ether around the London hard fork issue.

Ether reserves and netflow from crypto exchanges. Source: CryptoQuant

Working together with the exchange data, the third on-concatenation indicator showed a surge in ETH deposits to its smart contract.

In detail, users can pale 32 ETH into Ethereum ii.0 smart contracts to go validators on its proof-of-stake blockchain. In doing and so, they can expect to received rewards for batching transactions into a new Ethereum cake or checking the work of other validators to go on the chain running securely.

The number of unique 32 ETH depositors crosses iv,000. Source: CryptoQuant

Analysts see the upshot equally bullish because it removes the agile Ether supply from apportionment against a potentially rising need.

"The increasing Ethereum 2.0 deposits bear witness a big trust in the future potentials of the Ethereum blockchain, which stirs the scarcity of its native token Ether," Waisman explained. "The state of affairs may impact positively on the coin's price."

"With these positive fundamentals, a return back to the previous all-time loftier of $iv,360 in the long term volition exist a mild appetite toll target for Ether."

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