Prediction: $
The price of Ethereum experienced a significant surge on March 26, reaching $3,663. This marks a 20% increase from the monthly low recorded on March 19. Market data indicates that investors have adopted a more optimistic outlook as the Bitcoin halving approaches.
Last week, Ethereum came close to falling below $3,000 following the sell-off after the Dencun Upgrade. However, on-chain data shows a notable shift in the sentiment of ETH investors due to the impending Bitcoin halving.
In anticipation of the Bitcoin halving scheduled for April 20, investors have been making strategic moves to safeguard their investments. Since the countdown hit the 30-day mark on March 19, Ethereum investors have adopted a more conservative trading approach.
Cryptoquant’s exchange reserves metric reveals that the number of ETH coins held in crypto exchange wallets and trading platforms has decreased by 200,000 over the past week. This decline suggests that traders are becoming more inclined to hold onto their assets instead of selling them in the short term.
Typically, a decrease in exchange reserves has a positive impact on the price of the underlying asset. In this case, it means that over $740 million worth of ETH coins have been transferred out of immediate market supply and into long-term storage or staking contracts. This has led to a 20% surge in ETH price since the outflows began on March 19.
If the conservative outlook among existing ETH investors continues, it is likely that the Ethereum price recovery phase will accelerate further in the coming days.
Analysts also predict that Ethereum price is poised for a breakout towards $4,000 ahead of the Bitcoin halving. The In/Out of the Money chart from IntoTheBlock supports this positive stance. Additionally, the majority of investors who bought ETH within the 20% range of the current prices are currently in profitable positions, indicating that they may be hesitant to sell.
However, if the market experiences another downturn, the bulls will likely defend the psychological support level of $3,500.
In conclusion, the Ethereum price surge can be attributed to investors’ optimistic outlook ahead of the Bitcoin halving. The shift in investor sentiment, as evidenced by the decline in exchange reserves, suggests that the Ethereum price recovery phase will continue to gain momentum.
