Signs of a Potential Ethereum Rally to $3,000
Ethereum’s on-chain analytics and the current price trajectory could be hinting at an imminent climb, with a goal of reaching $3,000. The activity surrounding Ethereum is signaling an uptick in bullish sentiments as Ether’s available reserves on exchanges hit an unprecedented low, and staking deposits continue their upward trajectory. Furthermore, Ethereum’s technical analysis suggests that a $3,000 threshold may not be out of reach if the buyers manage to successfully overcome the resistance barriers between $1,900 and $2,000.
Record Low ETH Balances on Exchanges
There’s been a significant decrease in the amount of ETH held on exchange platforms, hitting an all-time low of 12.6%, based on data gathered by blockchain analytics provider, Glassnode. This pronounced drop within the last month could be interpreted as a bullish indicator, given that a lesser supply on exchanges could mean limited tokens for selling, potentially leading to a price increase.
Amidst the regulatory clampdown on leading exchanges such as Binance and Coinbase, there’s been a noticeable increase in the volume of withdrawals. Although these figures might be influenced by investors’ anxiety over the trustworthiness of centralized exchanges, the current situation shows some similarities with the November 2022 events. Back then, an analogous decrease in exchange balances coincided with a swift 33% price hike for ETH.
Increasing Ether Locked in Staking Contracts
Meanwhile, there has been a noticeable upswing in the volume of ETH locked in staking contracts since the Shapella upgrade in April. Currently, staking contracts hold over 23 million ETH, which makes up 19.1% of the total Ethereum supply.
Additional data from Glassnode illustrates that close to 30% of the total supply of ETH is committed to smart contracts, inclusive of DeFi and staking contracts. This is a noteworthy increment from the 25.5% recorded at the dawn of 2023. Typically, an increase in withdrawals from exchanges, coupled with larger deposits into smart contracts, reduces the liquid supply of ETH and could result in a positive price impact.
ETH/USD Price Outlook
Recently, the price of Ether ascended past the 50-day moving average, positioned at $1,823.09, which signals a potential bullish trend. At present, the ETH/USD pair is grappling with resistance around the $1,906 mark.
If the price can break through the $2,000 mark, this could potentially trigger a swift rally towards the 2022 breakdown levels, hovering around $3,000. This projection aligns well with the targets of the current bullish ascending channel pattern.
The ETH/BTC pair is striving to secure support around the 2023 lows of 0.06255, denoted in Bitcoin terms. If this level is breached, we could be looking at bearish targets set at 0.05689 BTC.
However, according to the relative strength index metric, the ETH/BTC pair is currently oversold, suggesting a potential price rebound may be on the horizon.
The funding rate for the ETH perpetual swap contract has been on a climb, touching monthly highs, which should serve as a word of caution for recent buyers.
There’s a likelihood of a price correction towards the lower region of the ascending triangle pattern on the ETH/USD pair, settling around $1,680. However, with current on-chain activities and market indicators, the scales seem to be tipping more towards an upward trend over a potential short-to-medium-term bearish course.
In addition to the above factors, the trajectory of Bitcoin’s price and the ability of BTC investors to maintain the $30,000 level could play an integral role in supporting Ethereum’s upward momentum.