Here’s what stands between Ethereum and $3,500

The month of September has been bearish for most of the market’s top coins. However, as October rolled around, new market anticipation was spotted among participants. The start of Q4 has been blasting, to say the least, with Bitcoin and Ethereum noting close to 10% gains in just 12 hours.

Today, while those big gains have resulted in consolidation at key resistance levels, market expectations heading into the final quarter of 2021 have intensified.

One breach after the other

On 1 October, Ethereum broke past the $3100-resistance. At the time of going to press, ETH was trading at $ 3,275, noting daily gains of nearly 7.71% and weekly gains of 10.77%. On higher timeframes, the Relative Strength Index (RSI) for ETH noted a sharp uptick as cash inflows poured in.

Even though Ethereum was seeing major resistance at the $ 3,300 level, there were clear signs that pointed to a good growth path for the top altcoin. One of the signs was that more than 1.2 billion worth of ETH was burned in the third quarter. This has given way to shock tales in the market.

The aforementioned conditions, alongside price gains and a noticeable downtrend in Ethereum reserves on exchanges, could stir up a supply shock. This could increase the price in the medium to short term.

Ethereum’s metrics – Are they even on the same page?

Notably, active addresses holding ETH for less than a month (which mostly constitutes retail traders) have seen a slight increase over the previous month. Looking at the division of the market for ETH, it should be noted that while the holders have remained more or less the same, cruisers and traders were more active last September than in August. This again aligned with the downtrend of ASOL.

At the time of writing, the ASOL for ETH sat at its lowest level since 20 October. This downward trend was indicative of young coins spent. This is often associated with traders and short-term holders. It also means that old trading results remain dormant and there is a high conviction to continue holding the asset.

That being said, ETH’s Network Growth has remained stagnant, despite rising prices. Compared to the rally in May, the growth of the network has diminished considerably.

However, after Visa revealed the concept of Universal Payment Channels through a layer-2 network powered by Ethereum, market anticipation from the top alt has heightened again. The effects of the same have been seen in the very positive social sentiment for Ethereum, at the time of writing.

While some metrics did paint a bullish picture for the top altcoin, the price did face strong resistance going forward. It will be crucial for ETH to return the same for a lasting recovery. Only then can $ 3,500 really be in crypto’s sights.

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