Ethereum worth crossed the $2,900 milestone on Feb. 19, however rising quantity of buying and selling exercise throughout the ETH spot markets might propel it even additional.
With traders putting bullish bets forward of Bitcoin ETFs buying and selling hours, is Ethereum worth set for the much-anticipated bounce towards $3,500?
Ethereum buying and selling quantity crosses $25 billion milestone
Ethereum worth made one other big stride on Feb. 19 because it crossed the $2,900 territory to carry its positive factors for February 2024 to the 30% mark. File-breaking inflows from Bitcoin ETFs and institutional entities in current weeks has been a significant driver behind the market rally.
ETH witnessed an uncommon spurt within the buying and selling exercise in UTC morning hours on Feb. 19, probably on account of strategic traders trying to place bullish bets forward of the resumption of Bitcoin ETF buying and selling periods within the US.
Santiment’s every day buying and selling quantity tracks the nominal worth of confirmed transactions involving a specific cryptocurrency inside a 24 hour interval.
The chart beneath illustrates an preliminary drop-off in ETH buying and selling on the shut of Bitcoin ETF buying and selling on Friday Feb. 16. However since then, it has been on a exceptional rise.
On the time of writing round 10:30 hrs GMT on Feb. 19, ETH buying and selling quantity has surged to $26.7 billion, the very best since Jan. 11.
Usually, rising buying and selling quantity is bullish for quite a few causes. Firstly, it alerts robust investor curiosity within the underlying cryptocurrency. However extra importantly, heightened market liquidity permits traders to execute trades at favorable costs with out scuttling the upward worth momentum
Bitcoin ETFs acquired over 17,000 BTC within the final buying and selling week between Feb. 12 and Feb. 16. In the event that they proceed on the identical trajectory, the buying and selling quantity on Ethereum and different mega-cap altcoins might rise even additional, through the earlier week.
Buyers shifted ETH price $220M into long-term financial savings in 3 days
The move of Ethereum on exchanges for the reason that shut of buying and selling on Feb. 16 is one other crucial metric pointing in the direction of traders’ conviction of one other bullish week forward.
CryptoQuant’s Alternate Reserves metric tracks the entire variety of cash deposited in exchange-hosted wallets and acknowledged buying and selling platforms. This serves as a proxy for measuring traders’ tendency to promote within the short-term.
As depicted within the chart beneath, traders held opening balances of 14,060,510 ETH as of Feb. 16.
However apparently, traders shipped over 80,222 ETH cash into long-term storage and staking contracts within the final 3 days, leaving solely 13,980,288 ETH of their buying and selling wallets at press time on Feb. 19.
A decline in alternate reserves usually impacts asset worth positively, because it successfully results in a brief lower in market provide. Unsurprisingly, a better take a look at the chart exhibits how ETH worth has been on an uptrend for the reason that alternate reserves started to drop quickly in November 2023.
Valued on the 5-day Easy Transferring Common worth of $2,730, traders have shifted roughly $220 million price of ETH into long-term storage.
Lowering the market provide, by such a big margin might additional speed up the rally if the market momentum stays bullish within the week forward.
Forecast: can Ethereum worth attain $3,500?
Primarily based on the buying and selling quantity and alternate reserves traits analyzed above, there’s an amazing bullish sentiment amongst traders that ETH worth might make one other leg-up towards $3,500 within the week forward.
Nevertheless, ETH presently faces a looming sell-wall on the $3,000 psychological resistance.
IntoTheBlock’s world in/out of the cash knowledge exhibits that 4.5 million addresses obtained 1.7 million ETH inflows on the common worth of $3,049. Contemplating that they had been holding at a loss for practically 3-years quite a few them might look to take some earnings.
But when the bull can scale this resistance zone, a breakout towards $3,500 may very well be on the playing cards.
On the draw back, the bears might regain a foothold out there if they’ll pressure a reversal beneath $2,000. Nevertheless, as seen above, the 4 million addresses acquired 3.3 million ETH at a minimal worth of $2,640.
To keep away from dipping into losses, these traders might make frantic purchases to cowl their positions, and presumably, set off an instantaneous ETH worth rebound.