Fun

Ethereum price hits resistance at $3K, but data currently favors ETH bulls

News Feed - 2024-02-23 05:02:30

Marcel Pechman3 hours agoEthereum price hits resistance at $3K, but data currently favors ETH bullsEthereum price struggles at the $3,000 level, but data hints at a resumption of the bull trend.1778 Total views64 Total sharesListen to article 0:00Market AnalysisOwn this piece of crypto historyCollect this article as NFTJoin us on social networksEther (ETH) is currently wrestling with the $3,000 resistance level, following a remarkable 29.7% surge from Feb. 6 to Feb. 20. Analysts attribute ETH"s recent gains to a decrease in supply, driven by growing demand for staking, decentralized finance (DeFi) applications, and the shrinking supply caused by the network"s proof-of-stake burn mechanism.


While Ether’s rally to $3,000 is impressive, the real question is can the altcoin gather enough strength to reclaim the sought-after $3,300 level last seen in March 2022?Ethereum hasn"t even seen its demand season yet.

When it does we have no idea how high price will go.

So much ETH in staking, and restaking, and defi, and getting burnt this cycle - no new supply.

Add an ETF to that?

There"s not enough ETH to go around.— RYAN SΞAN ADAMS - rsa.eth (@RyanSAdams) February 15, 2024


Crypto investor Ryan Sean Adams, sharing insights on X social network, suggests that "Ethereum hasn"t even hit its demand season yet." Adams speculates that the potential introduction of a spot Ether exchange-traded fund (ETF) could boost its price, especially in the absence of "new supply." The supply data clearly shows a decrease of 18,960 ETH in total coins circulating over the past 30 days, according to ultrasound.money. It"s essential to note that this metric doesn"t necessarily reflect the ETH available for sale, which can be measured using net deposits on exchanges.Ether net transfers to exchanges, 7-day average. Source: Glassnode


Looking at the 7-day trend, there"s a preference for net withdrawals since Feb. 15, although this could change easily, as seen in early January. Contrary to expectations, Ether"s price remained relatively steady in the 30 days leading up to Jan. 5 at $2,300, suggesting that whatever triggered the sale wasn"t directly linked to a price rally. In essence, the dynamics of staking and demand for ETH in decentralized applications don"t seem to directly impact the supply available for sale.


Technically, the potential approval of the ETF could trigger a rally in Ether"s price, with analysts estimating approval odds between 50% and 80%, leaving room for a positive surprise. However, the likelihood of Ether consolidating above $3,300 diminishes if Bitcoin"s (BTC) bullish momentum falters, signaling that institutional investor inflow might not be enough to drive its price. Additionally, the historical correlation between BTC and ETH prices remains noteworthy.Ether (ETH) 20-day correlation vs. Bitcoin (BTC). Source: TradingView


There"s no surety that the historical trend will persist, particularly with the potential bullish momentum from the spot Ethereum ETF, but sustained decoupling between Bitcoin"s and Ether"s price has been a rarity in the past 9 months.


Instead of fixating on the anticipated ETF decision in May, traders should examine other catalysts, such as the demand for ETH stemming from airdrop snapshots and the overall Ethereum network demand.


As an illustration, enthusiasm for upcoming Ethereum token launches dimmed after the Starknet (STRK) airdrop, a highly anticipated layer-2 token, plummeted nearly 60% since Feb. 20. This drop was attributed to substantial sell pressure from airdrop hunters and major Ethereum infrastructure firms like Nethermind. Moreover, criticism surfaced regarding participants deemed ineligible for the distribution and controversies surrounding the release of 13% of the supply just two months after launch.


To gauge whether professional traders maintain a bullish stance on Ether"s price, grappling with the $3,000 support, one should analyze the price of ETH futures monthly contracts compared to regular spot markets. In neutral markets, these instruments typically trade at a premium of 5% to 10% to accommodate their extended settlement period.


Related:Starknet airdrop largely successful despite controversiesEther 1-month futures premium vs. spot markets. Source: Laevitas.ch


Note the Ether 1-month futures premium has remained above 14% since Feb. 17, showing no signs of diminishing demand for leverage longs (buys). Additionally, despite signaling bullishness, the metric falls short of displaying excessive optimism seen in the 25% premium from Jan. 2. The data suggests that Ether bulls need not fret about supply on exchanges or the use of leverage in futures markets, making the prospect of ETH surpassing $3,300 still plausible.


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.# Cryptocurrencies# Ethereum# ETF# Markets# Cryptocurrency Exchange# Leverage# burn# Supply# Futures# Ether Price# Layer2# Ethereum PriceAdd reactionAdd reaction

News Feed

Central Bank of Argentina Issues New Compliance Rules for Digital Wallets
Central Bank of Argentina Issues New Compliance Rules for Digital Wallets The Central Bank of Argentina has issued a new set of rules for operators of digital wallets in the countr
Antonio Juliano steps down as CEO of dYdX
Ana Paula Pereira8 hours agoAntonio Juliano steps down as CEO of dYdXThe decentralized exchange is now led by Ivo Crnkovic-Rubsamen, a former trader and dYdX chief strategy officer.1797 Total views10 Total sharesListen t
Mexican Billionaire Ricardo Pliego Invests 10% of Liquid Portfolio in Bitcoin- Says the Crypto Shields Against Wealth Expropriation
Mexican Billionaire Ricardo Pliego Invests 10% of Liquid Portfolio in Bitcoin- Says the Crypto Shields Against Wealth Expropriation Mexico’s second-richest
Deloitte: Metaverse Could Add $1.4 Trillion a Year to Asia’s GDP
Deloitte: Metaverse Could Add $1.4 Trillion a Year to Asia"s GDP Deloitte estimates the metaverse could add $1.4 trillion to Asia’s GDP annually by 2035. Noting that the meta
Nasdaq-Listed Crypto Firm Sued, Accused of Defrauding Investors With Fake Bitcoin Mining Business
Nasdaq-Listed Crypto Firm Sued, Accused of Defrauding Investors With Fake Bitcoin Mining Business A class-action lawsuit has been filed against a Nasdaq-listed b
Dydx Protocol Unlocks Airdrop Rewards; Users Get up to $50K
Dydx Protocol Unlocks Airdrop Rewards; Users Get up to $50K Dydx, a decentralized exchange, finally unlocked its airdrop rewards for users. Its governance token, dydx, was locked d
Zhiyuan Sun4 hours agoFilecoin storage utilization surpasses 7% in Q2: ReportAlthough utilization rose, protocol and supply revenue declined, as more providers slashed fees to incentivize adoption.839 Total views13 Total
Bitcoin․com Partners with HAPI to Launch High-Yield Farm on Verse DEX and Enhance Wallet and DEX Security
Bitcoin․com Partners with HAPI to Launch High-Yield Farm on Verse DEX and Enhance Wallet and DEX Security press release Bitcoin.com , a global leader in accessible cryptocurrency
Record Producer Steve Aoki and Spawn Creator Todd McFarlane to Launch Solana-Powered NFT Market
Record Producer Steve Aoki and Spawn Creator Todd McFarlane to Launch Solana-Powered NFT Market On November 9, the two-time Grammy-nominated producer and DJ, Steve Aoki, announced
Bitcoin Mining Report Shows Network’s Emissions Account for 0.08% of the World’s CO2
Bitcoin Mining Report Shows Network"s Emissions Account for 0.08% of the World"s CO2 During the last year, Bitcoin — the cryptocurrency network that leverages proof-of-work
Report: Luxury Fashion Retailer Farfetch to Accept Crypto Assets for Payments
Report: Luxury Fashion Retailer Farfetch to Accept Crypto Assets for Payments The British-Portuguese luxury fashion retailer Farfetch said it will accept crypto assets soon thanks
Are ‘ETF Paper Bitcoins’ Suppressing BTC Prices? Analyst Provides Answers
Este artículo también está disponible en español. In a new YouTube video titled “There Is No ETF Paper Bitcoin,” Fred Krueger, an investor at the crypto hedge