Prediction: $
The price of Ethereum experienced a significant surge on March 26, reaching $3,663. This marked a 20% increase from the monthly low recorded on March 19. Market data indicates that investors have become more optimistic as the Bitcoin halving approaches.
Last week, Ethereum came very close to dropping below $3,000 following the sell-off after the Dencun Upgrade. However, with the Bitcoin halving drawing nearer, on-chain data reveals a notable shift in the sentiment of ETH investors.
In anticipation of the Bitcoin halving scheduled for April 20, investors have been making strategic moves to prepare for potential impacts. Since the 30-day countdown to the halving began on March 19, Ethereum investors have adopted a more conservative trading approach.
Cryptoquant’s exchange reserves metric, which tracks the number of coins held in exchange wallets and trading platforms, indicates that investors are less inclined to sell in the short term. Over the past week, the total number of ETH coins held on exchanges has decreased by 200,000.
A decline in exchange reserves often has a positive impact on the price of the underlying asset. In this case, the outflow of ETH from the immediate market supply into long-term storage options or staking contracts has contributed to a 20% surge in ETH price since March 19.
If more existing ETH investors continue to maintain a conservative outlook, the recovery phase of Ethereum’s price could accelerate even further in the coming days.
Analysts also point to other indicators that support a positive outlook for Ethereum’s price. The In/Out of the Money chart from IntoTheBlock suggests that ETH is poised for a breakout towards $4,000. Additionally, the majority of investors who bought ETH within the current price boundaries are currently in profitable positions, indicating a reluctance to sell.
However, in the event of a market downturn, it is expected that the $3,500 level will serve as a psychological support level that bulls will defend.
Overall, the market data and on-chain trends suggest that Ethereum’s price is likely to continue its recovery and potentially reach $4,000 in the near future, driven by the anticipation of the Bitcoin halving.
