Ethereum, after falling by almost 30% in September from its local high of $3800 has finally paced up. The lightning crash and the FUDs that followed have lowered the total crypto market cap by nearly 20% in the past three weeks. Nonetheless, with Bitcoin and Ethereum climbing by 4% and 7% on their daily charts, investors are looking forward to closing the quarter on a high note.
Ethereum leads recovery
Even though the rally in BTC has fueled the larger market rally, Ethereum’s rapid rebound to $ 3,100 appears to be leading the rally in the best coins. In fact, at the time of writing data from Coinmarketcap highlighted that Ethereum was the top gainer on daily charts, showing over 4% gains second only to Solana.
Ethereum’s relative strength index over a shorter period exhibited increasing buying pressure, which was a good sign for the top altcoin alongside the price rise. However, trade volumes in the spot market for ETH still remained low and the same was indicative of reluctance from the market participants after a crash.
While the market was still skeptical about ETH’s path heading into the fourth quarter, there were signs for a good growth path and possible gains for the first coin before the end of 2021.
Long-term metrics look good
Notably, over the past year, one-third of the ETH supply that was on exchanges has been moved off which is indicative of the patience that holders have even during market crashes.
In fact, Ethereum token circulation skyrocketed on September 27, to its highest level since June 22. A Santiment post pointed out that if signs of ETH utility and tokens being moved continue to grow then the prices are bound to follow.
That being said, ASOL noted low values last seen in March at the time of writing and generally those low values indicate daily traffic including young coins spent. This also meant that older transaction outputs remain dormant, and conviction to continue holding the asset is high.
An interesting trend was that when ASOL is examined alongside price, such low ASOL values were noted at the start of a rally. The last time ASOL measure this low, ETH’s price rallied by over 150% and saw an ATH of $4,337.
All eyes turning to ETH?
JPMorgan analysts in a recent report highlighted how big investors are turning their heads towards Ethereum. Bitcoin futures witnessed weak demand as BTC futures traded below spot prices, while, Ethereum futures premium rose 1%, which highlighted a strong divergence in demand towards ETH, as per the report.
So, with prices accelerating and institutions shifting to ETH, could Ethereum see another ATH? Well, while this is more of a ‘when’ than an ‘if’ question, ETH’s active addresses presented a worrying sign. Active addresses for ETH were noting a downtrend and saw low level of January 2021 at the time of writing. Previous Ethereum gatherings have been supported by high active addresses and high network activity. This time too, a slight rise could push ETH to higher levels.
