Anticipated prediction: Dollar’s Future Value.
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 positive outlook in anticipation of the upcoming Bitcoin halving event.
Last week, Ethereum came close to falling below $3,000 following the sell-off that occurred after the Dencun Upgrade. However, with the Bitcoin halving approaching, on-chain data reveals a notable change in the sentiment of ETH investors.
In preparation for the Bitcoin halving scheduled for April 20, investors have been making strategic moves to safeguard their investments. Since the 30-day countdown to the halving began on March 19, Ethereum investors have adopted a more conservative trading approach.
The exchange reserves metric provided by Cryptoquant tracks the number of ETH coins held in crypto exchange wallets and trading platforms. This metric serves as an indication of investors’ inclination to sell or seek profit-taking opportunities in the short term.
As of March 19, investors held a total of 14.2 million ETH coins across various exchanges. However, this figure has decreased by 200,000 ETH over the past week. A decline in exchange reserves suggests that traders are opting to hold their assets instead of selling.
This shift in investor behavior is likely influenced by the Bitcoin halving countdown. The correlation between the countdown and the decline in exchange reserves suggests that the impending halving event is a significant driver behind the change in Ethereum investors’ disposition.
A decrease in exchange reserves often has a positive impact on the price of the underlying asset. In this case, over $740 million worth of ETH coins have been transferred out of the immediate market supply into long-term storage options or staking contracts within the past week. This has contributed to a 20% surge in the price of ETH since March 19.
If more ETH investors continue to adopt a conservative outlook, the recovery phase of Ethereum’s price could further accelerate in the coming days.
Drawing insights from the $730 million decline in ETH market supply, it is speculated that the price of Ethereum is poised to break out towards $4,000 ahead of the Bitcoin halving. The In/Out of the Money chart from IntoTheBlock also supports this positive outlook. However, it should be noted that there is a major resistance cluster at $3,758, with a significant number of ETH addresses holding positions at that price.
The IOMAP chart indicates that the majority of investors who bought ETH within the 20% range of the current prices are in profitable positions. Unless there are significant external factors, these investors may be reluctant to sell, which could pave the way for a rebound to $4,000 as predicted.
In the event of another market downturn, the bulls are likely to defend the psychological support level at $3,500.
