Ethereum (ETH) faced a significant pullback at the end of August, erasing earlier gains from testing the $2,700 ceiling. However, ETH recently surged over 3%, trading at $2,521, despite weak investor confidence as indicated by a drop in the altcoin season index.

ETH exchange reserves have spiked, suggesting traders are moving profits to exchanges, indicating a distribution phase. This pattern has previously led to resistance and price retracement, and while there's been a slight increase in Open Interest among Futures traders, a stronger uptick is needed for a sustained bullish trend.

Long-term holders have been selling, contributing to a bearish sentiment. Despite a negative MVRV ratio suggesting ETH may be undervalued, the lack of significant buying activity following the recent surge suggests limited chances for a breakout above $2,500.