Anticipated prediction: $
Market data indicates that the price of Ethereum experienced a significant surge on March 26, reaching $3,663. This marks a 20% increase from the lowest point recorded earlier in the month on March 19. The data suggests that investors have become more optimistic as the Bitcoin halving approaches.
Last week, Ethereum came close to falling below $3,000 following the sell-off after the Dencun Upgrade. However, with the Bitcoin halving drawing near and the anticipated Ethereum ETFs experiencing delays, the price of ETH is now in a recovery phase, with a 20% gain on the weekly chart.
On-chain data trends indicate that this positive momentum in the Ethereum market can be attributed to investors making strategic moves to anticipate the impact of the upcoming Bitcoin halving, 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 held in crypto exchange wallets and trading platforms, reveals that investors currently hold a total of 14.2 million ETH across various exchanges. However, this figure has decreased by 200,000 ETH over the past week. A decline in exchange reserves often has a positive impact on the price of the underlying asset.
This decline in exchange reserves suggests that traders are choosing to hold onto their ETH rather than sell, possibly due to the Bitcoin halving countdown. This shift in investor sentiment could be a key driver behind the recent change in Ethereum’s market dynamics.
The decrease in exchange reserves means that over $740 million worth of ETH has been moved out of the immediate market supply and into long-term storage options or staking contracts. If demand remains steady and supply continues to shrink, it can lead to upward pressure on prices. As expected, the price of ETH has already increased by 20% since the exchange outflows began on March 19.
If more ETH investors maintain a conservative outlook, it is likely that the recovery phase of Ethereum’s price will accelerate in the coming days. Drawing insights from the significant decline in ETH market supply, it is possible that the price of Ethereum could break out towards $4,000 before the Bitcoin halving.
Analysis from IntoTheBlock’s In/Out of the Money chart supports this positive outlook. ETH currently faces a major resistance cluster from 854,150 addresses that acquired 981,710 ETH at the maximum price of $3,758. Additionally, the IOMAP chart shows that 76.9% of investors who bought ETH within the 20% boundaries of the current prices are in profitable positions. This suggests that many investors may be hesitant to sell, potentially allowing for 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.
