Key takeaways:

• Ether bulls target liquidity pockets near $2,500, supported by strong technicals including a dragonfly doji and a rebound from key support zones.

• With over 90% of BTC supply in profit and ETH lagging, Swissblock data suggests a “catch-up” period could be underway, echoing patterns from previous bull cycles.

• Inflows into spot ETH ETFs surged 68% in June, indicating a growing institutional appetite for Ether.

Ether (ETH) is experiencing a notable recovery, with its price climbing toward the $2,500 mark on Monday. The 2-week liquidation heatmap underscores this bullish trend, revealing aggressive price action as ETH targets liquidity-rich zones above $2,500. These zones, where market makers could hunt stop-loss orders, act as magnets, pulling prices upward amid potential short squeezes.

From a technical standpoint, ETH recently tested a multimonth support range between $2,100-$2,200, a critical level that held firm, signaling strong buyer interest. The three-day chart closed above $2,400 with a dragonfly doji, a candlestick pattern indicating a potential reversal after a range low. This candlestick pattern, marked by a long wick and bullish close, reflects sellers pushing early but buyers reclaiming control.

The price rise since May also marks the highest volume engagement since July-August 2022, a period during the last bear market, suggesting renewed retail and institutional interest.

The liquidation heatmap supports this outlook, showing ETH consistently forming higher lows above major liquidation clusters, with the path of least resistance pointing upward. Market makers could play a pivotal role in this liquidity-driven rally. As ETH approaches $2,500, the combination of technical strength and liquidity dynamics hints at a potential breakout.

Onchain analyst Amr Taha also highlighted that Binance saw over 61,000 ETH withdrawn on Monday, a strong bullish signal suggesting traders are moving assets off exchanges, likely pivoting from short-term speculation toward long-term holding strategies.

Related: Ethereum whales open $100M of leveraged bets after US strikes Iran

Ether could be poised for a significant surge as capital rotation patterns shift from Bitcoin, according to recent data by Swissblock. The analysis on X identifies a “Zone 5” accumulation phase, where historical data suggests significant upside for ETH. 

The charts highlight five key green zones: These periods of aligned fundamentals, surging supply in profit, and capital rotation mirror cycles like 2017 and 2021. Currently, over 90% of the BTC supply is in profit, indicating limited short-term upside, while ETH lags with under 80% profit realization. This lag, a recurring signal to ETH’s catch-up play, is detailed across BTC and ETH supply-in-profit metrics, suggesting capital could be rotating as BTC peaks.

The analysis emphasized that Zone 5 mirrors past setups where ETH outperformed, with the ETH/BTC ratio nearing multi-year lows, a signal of undervaluation. The current data underscores a familiar pattern with capital historically flowing into ETH, setting the stage for an altcoin rally.

Recent spot ETF netflows further signal this shift. In May, spot Bitcoin ETFs saw $5.23 billion, dropping to $2.64 billion in June, while spot Ethereum ETFs surged to $950 million from $564 million. This yields a relative ratio shift with ETH ETF inflows growing by 68.4% month-over-month, while BTC inflows have declined by 49.5%.

This 118% swing in favor of ETH also highlights the acceleration of a possible institutional capital rotation. Thus, institutional investors could swing toward ETH, reinforcing Swissblock’s bullish outlook.

Related: Ethereum dev floats halving slot times to 6 secs, doubling blocks

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.