Recently, Ethereum has been engulfed in fear, uncertainty, and doubt (FUD) following the initiation of an investigation by the US government into the ETH foundation. Despite a challenging week that saw Ethereum’s price dip to $3K, the second-largest cryptocurrency by market capitalization shows strong bullish signs, defying the bearish sentiment and regulatory scrutiny it faces. This is due to several bullish on-chain metrics, supporting the demand for ETH price.

Ethereum Flashes Bullish On-Chain Data

While Bitcoin (BTC) experienced a decrease in its price to $60,000, it’s Ethereum’s metrics that have caught the attention of many in the crypto market. Notably, Ethereum saw a massive $720M net inflow into centralized exchanges (CEXs), marking its largest weekly net inflow since September 2022. This influx comes amid regulatory FUD brought by the recent enforcement action.  

The Ethereum Foundation is reportedly under examination by an unidentified regulatory body. According to Fortune, this investigation is believed to be a component of the U.S. Securities and Exchange Commission (SEC)’s assertive legal efforts to categorize Ethereum as a security.

However, amid this FUD, Ethereum remains strong as seen in its on-chain data. According to IntoTheBlock, Ethereum’s Mainnet transfer volume has hit a peak not seen since May 2022, with a rising daily average suggesting a new bull market’s early signs. Amid falling prices and regulatory hurdles, the patience of long-term Ethereum investors stands out as their continued accumulation of ETH touched record highs in long-held wallets.

As of now, the Netflow for Ethereum hovers around the negative zone as the outflow volume surpasses inflow. Currently, the Netflow for ETH stands at -37.8K ETH. This suggests that the outflow volume is exceeding inflow, reducing the ETH exchange reserves. This might plunge the chances of a selloff in the coming days.

Despite the drop in ETH prices, holders continue to accumulate, maintaining steady buying pressure as support levels are strongly defended. This could increase buyer confidence in the days ahead.

What’s Next For ETH Price?

Ether’s inability to stay above its 20-day Exponential Moving Average (EMA) of $3,442 led to significant selling pressure from traders. This resulted in the cryptocurrency’s price dropping to its crucial support level at $3K. As of writing, ETH price trades at $3,291, declining over 6.8% from yesterday’s rate.

The 20-day EMA is beginning to decline, and with the Relative Strength Index (RSI) in negative territory below the midline, it appears that the bearish investors are gaining control. Any attempts at recovery are expected to encounter resistance at the 20-day EMA, potentially trapping the ETH/USDT pair in a range between the two moving averages for a while.

Should the price fall below the crucial $3K mark, it would indicate that investors are quickly exiting their positions, possibly sending the price down to $2,860. On the other hand, a move above the 20-day EMA would suggest a comeback of bullish momentum.