2023-4-10 20:30 |
The $2,000 price mark appears to constitute a major psychological roadblock for Ethereum investors. With ETH trending precariously below $1,900 for the past week, on-chain data reveals how traders’ recent decline in whale transactions and flatlined exchange balances could exacerbate Ethereum price stagnation.
On-chain data reveals that Ethereum whales have been shying away from making large bets in recent weeks. Likewise, the flatlined supply of coins on exchanges suggests that investors could be looking to pounce on short-term profits.
Ethereum Whales Await Market DirectionAccording to Santiment, ETH transactions worth $100,000 and above have declined considerably as the upcoming Shapella network upgrade draws near. The chart below shows how the ETH Whale transaction count has decreased progressively in the past month. Compared to the 14,655 transactions recorded on March 11, it has declined 84% to a lowly 2,346 at the close of April 9.
Ethereum (ETH) Price vs. Whale Transaction Count. April 2023. Source: SantimentThe activity of Whales is often seen as a prime indicator of market sentiment. If they are making fewer transactions, it could signal low confidence in the short-term price prospects of the underlying coin. As such, sharks and other retail investors may also become less interested.
Another critical factor that confirms the gloomy short-term outlook for Ethereum is the flattening supply of ETH on exchanges.
As Ethereum experienced a price surge toward the close of March, investors began to move tokens off exchanges. However, the chart below shows how the Ethereum outflows have gone flat since the start of April.
Between March 31 and April 10, ETH Supply on Exchanges has remained relatively unchanged at 12.49 million coins.
Ethereum (ETH) Price vs. Whale Transaction Count. April 2023. Source: SantimentThe current trend shows Ethereum investors holding coins on exchanges to potentially pounce on short-term trading opportunities rather than offline wallets, to position for future gains. This leaves huge supply volumes to fulfill buy orders without causing significant upward pressure.
In summary, the Whales transaction decline and a steady supply of coins on exchanges may pose a strong challenge to Ethereum’s price rally.
ETH Price Prediction: Major Resistance on the Road to $2,500According to IntoTheBlock’s Global In/Out of Money, the bears can take control momentarily if ETH cannot hold its price support at $1,800. However, the 2 million addresses that bought 4 million ETH around that price will offer support.
If the support does not hold, then ETH could drop further to $1,730, the minimum price that 3 million address has paid for 7.3 million coins.
Ethereum ETH Global In/Out of Money Price Distribution. April 2023. Source: IntoTheBlockStill, if the whales regain confidence, the ETH could rally above $2,000. However, a cluster of 1.7 million holders that bought 1.84 million coins for prices close to $2,000 could look to sell once they break even.
If Ethereum’s price can scale the $2,000 resistance, it could ride the momentum and proceed toward the $2,500 zone. But the 8.5 million addresses holding 26.8 million coins can then start a sell-off once ETH approaches $2,500.
The post Ethereum (ETH) Price Stagnates Below $2,000, On-Chain Data Reveals Two Key Reasons appeared first on BeInCrypto.
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