Prediction: Dollar Forecast
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 recorded on March 19. The data indicates that investors have adopted a more optimistic outlook in anticipation of the Bitcoin halving event.
Last week, Ethereum came very close to falling below the $3,000 mark after the sell-off following the Dencun Upgrade. However, with the Bitcoin halving approaching, on-chain data suggests a notable change in the sentiment of ETH investors.
In the 30-day countdown to the Bitcoin halving, investors have shifted 200,000 ETH into long-term storage. This strategic move is believed to be an attempt to anticipate the potential impact of the halving event scheduled for April 20.
After the sell-offs that accompanied the Dencun upgrade and the delays surrounding the eagerly 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 indicate that this positive shift in ETH market momentum can be attributed to investors taking precautionary measures to stay ahead of the potential effects of the Bitcoin halving. 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, which tracks the number of coins currently held in exchange-hosted wallets and trading platforms, serves as an indicator 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 and trading platforms. However, this figure has decreased by 200,000 ETH over the past week.
A consistent decline in exchange reserves suggests that traders are opting to hold onto their ETH and may be hesitant to sell, depending on the timeframe and market conditions. This shift in the 30-day Bitcoin halving countdown indicates that the upcoming event could be a significant factor influencing the sentiment of Ethereum investors.
Regardless of the catalyst, a decrease in exchange reserves often 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 moved out of the immediate market supply and into long-term storage or staking contracts within the past week.
If demand remains steady and the supply continues to shrink, it puts upward pressure on prices. As a result, the price of ETH has already experienced a 20% surge since the outflows from exchanges began on March 19.
Therefore, if more existing ETH investors maintain a conservative outlook, the recovery phase of the Ethereum price could accelerate further in the coming days.
Analyzing the $730 million decline in ETH market supply, it appears that the price of Ethereum is poised to break out towards $4,000 ahead of the Bitcoin halving event. The In/Out of the Money chart from IntoTheBlock supports this positive stance. ETH currently faces significant resistance from 854,150 addresses that acquired 981,710 ETH at the maximum price of $3,758.
However, the IOMAP chart below shows that 76.9% of all investors who bought ETH within the 20% range of the current prices are currently in profitable positions. In the absence of any major macroeconomic pressures, the majority of these investors may be reluctant to sell, potentially leading to a rebound to $4,000 as predicted.
In the event of another market downturn, the bulls are likely to defend the psychological support level of $3,500.
The decision on the VanEck Ethereum ETF by the SEC has been delayed, and investors are proceeding with caution.
Follow us on Google News for more updates.
