Prediction: $
Market data reveals that the price of Ethereum experienced a significant surge on March 26, reaching $3,663. This marks a 20% increase from the monthly low that was recorded on March 19. The surge in price indicates that investors have adopted a more positive outlook leading up to the Bitcoin halving event.
Last week, Ethereum came dangerously close to dropping below the $3,000 mark following the sell-off that followed the Dencun Upgrade. However, with the Bitcoin halving approaching, on-chain data shows a notable shift in the sentiment of ETH investors.
In light of the wholesale sell-offs that occurred after the Dencun upgrade and the delays surrounding the highly anticipated Ethereum ETFs, the price of ETH is now in a recovery phase, with a 20% gain on the weekly chart.
On-chain data trends suggest that this positive shift in Ethereum market momentum can be attributed to investors strategically preparing for the potential impacts of the Bitcoin halving, which is scheduled for April 20. Notably, since the 30-day countdown to the Bitcoin 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 currently held in crypto exchange wallets and trading platforms, indicates that investors are less inclined to sell or seek short-term profit-taking opportunities. As of March 19, investors held a total of 14.2 million ETH coins across various platforms, but this number has decreased by 200,000 ETH over the past week.
A decrease in exchange reserves is often a positive indicator for the price of an asset. In this case, it means that over $740 million worth of ETH coins have been moved out of the immediate market supply and into long-term storage or staking contracts. With the decline in supply and steady demand, ETH price has already experienced a 20% surge since March 19.
If more ETH investors continue to adopt a conservative outlook, the recovery phase of Ethereum’s price could accelerate even further in the coming days.
Analysts also draw insights from the $730 million decline in ETH market supply, suggesting that Ethereum price could potentially break out towards $4,000 leading up to the Bitcoin halving. The In/Out of the Money chart from IntoTheBlock supports this positive stance, showing a major resistance cluster at $3,758. Additionally, 76.9% of investors who bought ETH within the 20% range of the current prices are currently in profitable positions, indicating that they may be reluctant to sell and potentially leading to a rebound to $4,000.
However, in the event of another market downturn, it is likely that the bulls will aim to defend the psychological support level of $3,500.
