Key Points
- Ethereum’s (ETH) price struggles to exceed $3,900 as the supply on exchanges reaches a four-month high.
- Increased inflow of Ethereum into centralized exchanges signals heightened selling pressure.
Despite a 32% surge in Ethereum’s value against the US dollar over the past two weeks, the price struggles to break the $3,900 mark. Recent data from IntoTheBlock indicates that the supply of Ethereum on centralized exchanges is retesting a six-year low, with the flow into these exchanges reaching a four-month high on Saturday. More than 140k units were recorded.
Ethereum Inflows and Selling Pressure
High inflows of Ethereum into centralized exchanges typically signal increased selling pressure, which could potentially affect buyers. This trend is concurrent with speculation about the imminent approval of the remaining documents required to initiate trading of spot Ether ETFs.
The rise in Ethereum’s price has revived predictions of an upcoming altseason. The Bitcoin dominance has already broken down on the rising trend, and further declines are expected in the coming months.
Investor Behavior and Altcoins
The ETH/BTC pair on the weekly time chart is on the verge of a historical reversal of the falling channel, prompting more crypto investors to rotate their crypto cash to medium and small-cap altcoins to maximize gains. This is evident in the high volatility seen in some meme coins like Pepe (PEPE), Floki Inu (FLOKI), and Turbo (TURBO), which are already in the price discovery phase.
Investors may be depositing their Ethereum to centralized exchanges to distribute recent profits to other potentially profitable trading setups, especially in meme coins.
Ethereum Price Predictions
Despite several attempts, Ethereum’s price has struggled to rally beyond $4k. However, market analysts are optimistic that Ethereum’s price against the US dollar will rally toward its all-time high in the next two months. The high demand for Ethereum among institutional investors and retail traders could potentially trigger a short squeeze.
From a technical standpoint, if Ethereum buyers manage to consistently push the altcoin above the liquidity zone between $3,946 and $3,987, a rally toward $4,325, which coincides with the daily 3.618 Fibonacci Extension, will be inevitable. If Ethereum fails to push beyond $3,920 in the coming days, it could retrace towards $3,526, which coincides with the 1.618 Fibonacci Extension.
Ethereum’s Market Position
The Ethereum network boasts more than $66 billion in total value locked (TVL) and a vibrant web3 ecosystem supported by its interoperability. The recent approval of spot Ether ETFs has strengthened the argument that Ethereum is a commodity rather than a security asset.
