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Why Is Ethereum Price Down To $2,200 Today?

The Ethereum price has been among the worst hit in the flash crash that took place on Monday. The crash sent the asset’s price down below $2,200 for the first time in the last week and has continued to trend low around this point. As the market shows a bit of recovery momentum, questions remain about what could have triggered the crash.

Ethereum Price Fell Because Whales Have Been Selling

One of the most obvious causes of the flash crash that affected the Ethereum price is the fact that large holders have been selling. This month, ETH hit its highest level in the last year and this sent a lot of investors back into profit. Now, since there has not been a complete bullish turnover of the crypto market, there are expectations that the market could crash and investors are trying to secure profits before this happens.

Crypto analyst Ali Martinez flagged the selling from these large holders in a post on X (formerly Twitter) on Sunday. According to him, these large holders had actually begun selling when the price had first crossed $2,300. This means that the selling pressure had been mounting for a while before being reflected in the price.

The whales who hold more than 10,000 ETH in their balances had been reducing their holdings toward the end of November. By December, their holdings had fallen to their lowest point in the last three months, showing proof of massive sell-offs by these whales.

Ethereum price chart from Tradingview.com

Uncertainty About Macro Factors

Macroeconomic uncertainty has also played a role in the crypto crash that sent the Ethereum price to $2,200. One example of this is the CPI data release that is expected to take place on Tuesday. As investors eagerly await the results from the announcement, market fluctuations are expected.

The November inflation data is also expected to be released this week, as well as the Fed’s decision and statement happening on Monday. Ahead of these events, high volatility is always expected as investors move to secure some of their positions.

Nevertheless, Ethereum has begun to show some bullish momentum once more. It has since bounced from its lows of $2,170 and is back up above $2,000, where bulls are already providing a lot of support. If Bitcoin’s price continues to rise, Ethereum could reclaim the $2,300 level before the day is over.

The price of ETH is sitting at $2,238 at the time of this writing, down 4.50% in the last 24 hours.

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Ethereum Price Dives To $2,000, Why Dips Remain Attractive

Ethereum price took a major hit like Bitcoin and dropped over $350. ETH tested the $2,000 support and is currently attempting a fresh increase.

  • Ethereum declined over 8% and broke the $2,200 support zone.
  • The price is trading below $2,300 and the 100-hourly Simple Moving Average.
  • There was a break below a key bullish trend line with support near $2,340 on the hourly chart of ETH/USD (data feed via Kraken).
  • The pair could rise again unless there is a close below the $2,100 support zone.

Ethereum Price Took A Major Hit

Ethereum price climbed further higher above the $2,300 level. ETH even cleared the $2,350 level but the bears remained active near the $2,400 zone. A high was formed near $2,401 and there was a sharp decline like Bitcoin.

The price declined over 8% and there was a move below the $2,200 level. Besides, there was a break below a key bullish trend line with support near $2,340 on the hourly chart of ETH/USD. The pair even spiked below the $2,000 support before the bulls appeared.

A low was formed near $1,980 and the price is now attempting a recovery wave. There was a move above the $2,150 and $2,180 levels. The price climbed above the 50% Fib retracement level of the downward move from the $2,401 swing high to the $1,980 low.

Ethereum Price

Source: ETHUSD on TradingView.com

On the upside, the price is facing resistance near the $2,275 zone. The next key resistance is near the $2,300 level or the 76.4% Fib retracement level of the downward move from the $2,401 swing high to the $1,980 low. A clear move above the $2,300 zone could send the price toward the $2,400 level. The next resistance sits at $2,450. Any more gains could start a wave toward the $2,500 level.

Another Decline in ETH?

If Ethereum fails to clear the $2,300 resistance, it could start another decline. Initial support on the downside is near the $2,180 level.

The next key support is $2,120. The main support is now near $2,100. A downside break below $2,200 might start an extended decline. The key support is now at $2,000, below which there is a risk of a move toward the $1,880 level in the near term.

Technical Indicators

Hourly MACD – The MACD for ETH/USD is gaining momentum in the bearish zone.

Hourly RSI – The RSI for ETH/USD is now below the 30 level.

Major Support Level – $2,100

Major Resistance Level – $2,300

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Ethereum Rises: ETH Remains Steady At Over $2,300 Amid Bull Market Expectations

Recent patterns indicate that the impetus fueling Ethereum’s climb is far from diminishing, and the price trajectory of the cryptocurrency has shown resilience. Ethereum may not be as advanced as some of its L1 competitors, but it stands out from the crowd thanks to its large developer community, immense acceptance, and crucial role in DeFi and other blockchain-based applications.

Ethereum Remains Firm At $2,347

At the time of writing, ETH was able to keep a strong footing at the $2,300 level, trading at $2,347, nearly unchanged in the last 24 hours, but tallied a 10% increase in the last seven days, data from Coingecko shows.

There is still a lot of room for profit in the current bull market, even though Ethereum’s price spike hasn’t been as dramatic as other altcoin’s. Size, liquidity, and being the leading platform for smart contracts all contribute to Ethereum’s continued appeal as an investment.

This means that ETH’s price performance could be greatly enhanced by any further market increases. Ethereum, according to technical research, is about to see growth, and it is now testing key resistance levels. Both retail and institutional investors would be interested if the price breaks out above these levels, as it could indicate that the positive trend would continue.

For the first time in more than a year, Ethereum’s price has moved into a new range. The accumulation patterns seen in several top addresses indicate that this new range has created a chance for persistent price increases.

Ethereum’s Growing Holdings And 2024 Roadmap

The most popular Ethereum addresses on exchanges and those outside of them have shown clear patterns of accumulation in the last several months, according to new data from Santiment.

A large number of top non-exchange addresses have been buying Ethereum at different prices, which has caused their holding volume of ETH to rise steadily and now surpass 54 million.

At the same time, following their most recent execution layer meeting on December 8, Ethereum developers have laid out a detailed strategy for the network’s future in 2024, including new suggestions, major upgrades, and more.

Meanwhile, Ethereum is predicted to significantly outpace mega-cap tech stocks. After the Bitcoin miners’ payouts are halved,  investment firm VanEck thinks Ethereum will soar. In the past, this has caused a fresh spike in the price of Bitcoin, with the proceeds going into altcoins.

Ethereum won’t surpass Bitcoin, despite surpassing large stocks, and what “flippening” rumors claim. It is still believed that Bitcoin will continue to lead in market capitalization even though there is a chance that ETH may gain value in daily transaction volume.

(This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).

Featured image from Shutterstock

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Ethereums Future: Will Ethereum Recover?

In this exploration, we tackle the critical question: Will Ethereum recover? We’ll look at Ethereums future and analyze ETH’s present market status, potential for resurgence, the anticipated impact of the progress on Ethereum 2.0, and share expert price predictions.

Will Ethereum Recover? Analysis

The question “Will Ethereum recover?” depends on numerous factors. As of November 2023, Ethereum has shown signs of rebounding from its 2022 lows, suggesting a potential bottoming out. Key developments like the transition to Proof-of-Stake and the introduction of EIP (Ethereum Improvement Proposal) 1559, launched all the way back in August 2021, which brings deflationary pressure on Ethereum’s supply, making it a more attractive investment.

Additionally, Layer 2 (L2) technologies are enhancing Ethereum’s scalability, addressing previous challenges of high transaction fees and slow speeds. Ethereum’s dominance in the smart contracts sector and its substantial role in the decentralized finance ecosystem further strengthen its recovery prospects. However, predicting the exact trajectory of Ethereum’s recovery remains complex, with varying forecasts suggesting both potential ups and downs in the near future.

Ethereums Future Will Ethereum Recover?

Ethereums Future: Top-10 Factors Impacting ETH Price

These ten factors could be crucial for answering the question “Will Ethereum recover?“:

#1 Future Upgrades:

Ethereum’s development roadmap includes significant upgrades like Proto-Danksharding, also known as EIP-4844, and Full Danksharding, which could greatly impact its scalability and functionality. The successful implementation of these upgrades can boost confidence in the network and the Ethereums future price.

#2 Regulatory Approvals:

Regulatory decisions, such as the approval of a spot Ethereum Exchange Traded Fund (ETF) in the United States by the Securities and Exchange Commission (SEC), can have a substantial impact on Ethereum’s status as a digital asset. BlackRock filed for a spot ETH ETF in mid-November 2023.

#3 Overall Crypto Market Trends:

Ethereum’s performance is closely tied to the broader cryptocurrency market. A general uptrend in the crypto market, catalyzed by events like the Bitcoin halving, can positively influence Ethereum’s price.

#4 ETH Burn Rate:

Ethereum’s transition to a proof-of-stake (PoS) consensus mechanism includes a mechanism called EIP-1559, which introduces a fee-burning mechanism. The more ETH is burned in transactions, the scarcer it becomes, potentially increasing its value.

#5 Layer-2 Solutions:

The adoption and success of Ethereum layer-2 scaling solutions, such as Optimistic Rollups and zk-Rollups, can significantly improve the network’s scalability and reduce transaction fees. This could attract more users and developers.

#6 DeFi And NFT Activity:

Ethereum’s ecosystem heavily relies on DeFi (Decentralized Finance) and NFT (Non-Fungible Token) applications. Increased adoption and activity in these sectors can drive demand for ETH and positively impact its price.

#7 Competition:

Ethereum faces competition from other blockchain platforms like Solana and Cardano. The success or failure of these competitors can affect Ethereum’s market position.

#8 Macroeconomic Factors:

Economic events, such as inflation, monetary policy decisions, and global financial crises, can influence investors’ choices. Cryptocurrencies like Ethereum are sometimes seen as a hedge against traditional financial instability.

#9 Network Security:

The security of the Ethereum network is crucial. High-profile hacks or vulnerabilities can undermine trust in the platform and lead to price declines.

#10 Ecosystem Development:

The growth of the Ethereum ecosystem, including the number of dApps, users, and developers, can affect its adoption and value.

EIP-1559: Understanding The Ethereum Burn Rate

Ethereum’s burn rate is a key aspect of its economics, influencing both its supply dynamics and long-term valuation. To grasp the Ethereum burn introduced with EIP-1559, examining the latest data and understanding how this mechanism operates within the Ethereum ecosystem is crucial.

Ethereum Is “Ultra Sound Money”

EIP-1559 was a proposal that fundamentally restructured Ethereum’s fee market. Before this proposal, miners received the entire transaction fee. With activation on August 5, 2021, EIP-1559 introduced a base fee for transactions, which is burned (permanently removed from circulation), and only an optional tip is given to miners. This mechanism aims to make transaction fees more predictable and the network more efficient.

The “ultra sound money” meme emerged from the community in response to EIP-1559. It plays on the concept of “sound money,” a term traditionally used to describe money that is not prone to depreciation and is a reliable store of value, like gold.

With EIP-1559, Ethereum’s supply becomes more predictable and potentially deflationary—if the amount of ETH burned exceeds the new ETH issued, the total supply will decrease over time, hence the term “ultra sound money.” This is seen as an enhancement over “sound money,” with Ethereum not just maintaining its value but potentially increasing it due to the decreasing supply.

Ethereum Burn Rate Projections

The attached chart underscores the impact of these changes on Ethereum’s supply, especially post-EIP-1559, where the supply curve starts to flatten, suggesting a reduction in the growth of Ethereum’s total supply. This aligns with the concept of Ethereum becoming a deflationary asset post-EIP-1559, contributing to the narrative that Ethereum’s future could be as an “ultra sound” form of money.

On November 17, 2023, the Ethereum supply stood at 88 million ETH in accounts, 3.7 million ETH in contracts, and 28.5 million ETH in validators, totaling 120.3 million ETH. The dotted line indicates Ethereums future decrease in total supply due to the burning of ETH and the issuance changes post-Merge. The chart projects that the ETH supply will shrink to 117.7 million ETH in November 2025.

Ethereum burn rate and projected supply

Ethereum’s Future: Will Ethereum Go Back Up?

In the realm of cryptocurrency, technical analysis serves as a navigational tool to gauge market sentiment and potential price movements. Examining the 1-week ETH/USD chart provides insight into Ethereum’s price action and helps address the burning question: “will Ethereum recover?”

will ethereum recover | Ethereum price prediction
Fibonacci Levels And Price Targets

The chart showcases several Fibonacci retracement levels, which are crucial in identifying potential support and resistance zones based on previous price movements. Here are the key Fibonacci retracement levels highlighted:

  • 0.236: At $1,847, this level acts as a potential support zone.
  • 0.382: $2,441 is the next key Fib level, displaying the next resistance.
  • 0.5: The $2,922 level represents a psychological midpoint.
  • 0.618: At $3,402, this level is often considered the ‘golden ratio,’ a significant reversal point.
  • 0.786: $4,085 is a deeper retracement level that can signal strength in the prevailing trend.
  • 1: The full retracement level at $4,956 marks a complete return to all-time high.
  • 1.618: At $7,471, this extended Fib level could be the first long-term bullish target.
  • 2.618: $11,540 represents an optimistic projection in a strong Ethereum bull run.
  • 3.618: This level at $15,609 would be an extraordinary target for a sustained bull run.
  • 4.236: The $18,123 Fib level is the highest projected target on the chart, indicating an extreme bull case scenario.

Trend Lines, Resistance Zones And RSI

The chart shows a black ascending trend line, tracing the lows and signifying a potential area of support that Ethereum’s price could respect. If the price maintains above this line, it may indicate continued bullish sentiment.
The red box, or resistance zone, around the Year-To-Date (YTD) high at $2,137 underscores a region where sellers have previously entered the market. Overcoming this zone is critical for Ethereum to continue its upward trajectory.

The Relative Strength Index (RSI), sitting at 48.07, shows Ethereum is neither in the overbought nor oversold territory. This indicates a neutral momentum, which could precede a move in either direction.

Conclusion: Will Ethereum Recover?

While the chart presents strong arguments for an Ethereum bull run, with ETH price sustaining above critical support levels and challenging notable resistance zones, the future price action will depend on how the market interacts with these technical indicators. If Ethereum can break through the resistance encapsulated by the YTD high, we could see an affirmative answer to “Will Ethereum recover?” However, it is imperative for investors to monitor these levels closely, as they serve as a roadmap, not a crystal ball.

Ethereum Price Prediction By NewsBTC’s Head Of Research

Tony “The Bull” Severino, NewsBTC’s Head of Research, has provided an in-depth analysis of Ethereum’s market behavior in his latest edition of Coin Chartist. He observes, “Ethereum has yet to begin trending with a reading above 20 on the ADX, nor has it broken above the upper Bollinger Band. But these signals are likely coming soon.” This suggests Ethereum’s significant uptrend might be on the horizon.

Ethereum future prediction

Comparing Ethereum with Bitcoin, Severino notes, “ETHUSD is much lower within the Ichimoku Cloud than BTCUSD,” indicating Ethereum is currently lagging behind Bitcoin. However, he anticipates Ethereum will soon “switch to over-performance.”

Highlighting a positive development, Severino states, “ETHUSD 1W was finally able to crack above its TDST downtrend resistance.” Yet, Ethereum needs to form a perfected TD9 series for further bullish confirmation. On the monthly chart, Ethereum’s overbought status on the Stochastic indicator suggests a strong trend, as Severino points out, “Each time the Stochastic has confirmed a 1M above 80 on the Stock, there was a massive push higher.”

Will Ethereum recover

Looking ahead, Severino underscores the importance of Ethereum’s performance against Bitcoin, “But if ETHBTC can push back above 20 this will generate a buy signal on the 1M Stochastic and kickstart Ether’s over-performance above Bitcoin.” This analysis provides a detailed perspective on Ethereum’s potential future trajectory in the crypto market.

Ethereum 2.0 Price Prediction

The continuous evolution of Ethereum through its 2.0 upgrades sets the stage for an optimistic price prediction. As the network becomes more scalable, secure, and sustainable, the intrinsic value of Ethereum is likely to increase.

The successful completion of the Shanghai/Capella upgrade, which introduced staking, is already a significant milestone that demonstrates the network’s commitment to its roadmap. Such advancements are expected to reinforce investor confidence and could catalyze a bullish outlook for Ethereums future price.

Ethereum 2.0 Roadmap

Ethereum 2.0 represents a series of upgrades aimed at improving the network’s scalability, security, and sustainability. Contrary to the previous term ‘ETH2’, the roadmap is now defined by more specific upgrade milestones:

Past and Completed Upgrades

The Merge: This critical upgrade on September 15, 2022 marked Ethereum’s transition from proof-of-work (PoW) to proof-of-stake (PoS) and was a foundational step in the Ethereum 2.0 roadmap, eliminating the need for energy-intensive mining.

Another key feature, staking withdrawals has already been enabled with the Shanghai/Capella upgrade, which went live on April 12, 2023​

Future Ethereum Upgrades

  • The Surge: The next phase involves scalability improvements through rollups and data sharding. Danksharding, a key component, aims to make layer 2 rollups cheaper by incorporating “blobs” of data into Ethereum blocks​​.
  • The Scourge: This phase focuses on ensuring censorship resistance, decentralization, and addressing protocol risks, such as those arising from miner extractable value (MEV).
  • The Verge: It is designed to make verifying blocks easier.
  • The Purge: This stage aims to reduce computational costs and simplify the protocol, making running nodes more efficient.
  • The Splurge: This includes miscellaneous upgrades that do not fit into the other categories but are essential for the network’s growth and enhancement​​.

The Ethereum community has replaced the term “Ethereum 2.0” with more specific names for each upgrade, providing clearer insight into the network’s transition and improvements. These upgrades aim to turn Ethereum into a fully scaled, resilient platform, capable of supporting a global decentralized application system. As implementation of these phases progresses, Ethereum’s growing appeal as an investment could positively influence its price predictions.

Proto-Danksharding: EIP-4844

EIP-4844 introduces “shard blob transactions” to enhance Ethereum’s data availability in a way that aligns with future full sharding plans. This proposal creates a new transaction format containing “blobs” – large data segments essential for rollups, a Layer 2 solution, but inaccessible for EVM execution. It serves as a temporary scaling solution, bridging the gap until full sharding implementation.

Notably, rollups have become increasingly important for scaling Ethereum, as they offer a way to execute transactions outside the main Ethereum chain (Layer 1) and then post the data back to Layer 1. EIP-4844’s format is expected to greatly reduce transaction fees for rollups by offering a cheaper data storage mechanism compared to current methods​​.

Full Danksharding

Full Danksharding, which advances from Proto-Danksharding, will likely further reduce costs for Layer 2 rollups. It introduces “blobs” in a format slated for use in the final sharding design. This includes a new transaction type and an independent fee market for these blobs.

Full Danksharding will build on Proto-Danksharding and aims to further cut Layer 2 rollups’ costs. It will comprehensively implement data availability sampling and essential components for a fully sharded Ethereum network, including proposer-builder separation and proof of custody. This approach aims to assign only a portion of the data to validators, reducing the network’s load and enhancing scalability.

Ethereum 2.0 Price Predictions: Will Ethereum Recover?

As Ethereum continues to progress with its 2.0 upgrades, the financial community has been actively speculating on its future value. Here are some Ethereum price predictions from renowned institutions and analysts, answering the question “will Ethereum recover”:

VanEck: The investment management firm predicts that Ethereum’s price could reach as high as $11.8k by 2030. This projection is based on their assessment that Ethereum’s network revenues could rise from $2.6 billion to $51 billion in 2030, assuming Ethereum captures a 70% market share among smart contract platforms.

Standard Chartered: Analysts at Standard Chartered are bullish on Ethereum’s long-term potential. They forecast that the price of ETH could hit $4,000 by the end of 2024 and double to $8,000 by the end of 2026. Their Ethereum bull run prediction is based on Ethereum’s established dominance in smart contract platforms and the potential for emerging uses in areas like gaming and tokenization. Moreover, they suggest that the upcoming Bitcoin halving in April 2024 could positively impact the broader crypto market, especially Ethereum​.

Also, the potential approval of a spot Ethereum ETF in the US could significantly impact Ethereum’s price. BlackRock, the world’s largest asset manager, filed for a spot Ethereum ETF in mid-November 2023. The approval of this ETF would mark a major milestone for Ethereum, potentially attracting more institutional and retail investments and substantially boosting Ethereum’s market price.

FAQ: Ethereums Future

Will Ethereum recover?

Ethereum’s recovery depends on various factors including market trends, technological advancements, and broader economic conditions. With ongoing upgrades like Ethereum 2.0, many analysts remain optimistic about its long-term potential.

Will Ethereum Go Back Up?

Many market experts predict Ethereum will go back up. They are citing improvements from Ethereum 2.0 and increasing adoption in DeFi, NFTs and traditional finance.

Where Is Ethereum Going?

Ethereum is transitioning to a more scalable, secure, and sustainable network with Ethereum 2.0. This is potentially leading to increased adoption and value.

What Is The Ethereum Burn?

The Ethereum burn, introduced in EIP-1559, permanently destroys a part of transaction fees, potentially creating deflationary pressure on Ethereum’s supply.

Is Ethereum Going Back Up?

Current market predictions and the development roadmap suggest potential for Ethereum’s price to increase. But the exact trajectory will depend on multiple factors.

How Many Ethereum Burned So Far?

As of the latest available data, the Ethereum network has burned 0.2 million ETH tokens since implementing EIP-1559. The burn rate dynamically adjusts based on network activity.

When Will The Ethereum Bull Run Start?

The start of a bull run for Ethereum is speculative. It depends on market cycles, investor sentiment, and significant catalysts like upgrades and regulatory developments.

Will Ethereum Go Down?

Market volatility is inherent to cryptocurrencies. While Ethereum may experience downturns, its fundamental development aims to mitigate such risks and foster growth.

What Will Be The Future Price Of Ethereum?

Various predictions exist, ranging from moderate increases to high valuations by 2030. Standard Chartered predicts $8,000 per ETH by the end of 2026.

Is Ethereum Going To Go Back Up?

The general consensus among many analysts is positive. The value of Ethereum is expected to rise as it develops and becomes more widespread in the blockchain sector.

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Bitcoin and Ethereum Fees Rise By Over 50%: Will BTC Conquer $69k?

There is a spike in crypto on-chain activity if transaction fees lead. According to IntoTheBlock data on December 8, Bitcoin transaction fees are up by over 60%, while “gas” in Ethereum has climbed by nearly 50% in the past week. 

Bitcoin And Ethereum Transaction Fees Rise By Double-Digits

This surge in activity can be pinned to multiple factors, mainly growing user interest and the ongoing crypto bull market. To illustrate, Bitcoin and Ethereum prices are trending at 2023 highs above $43,500 and $2,300 when writing.

Even so, the crypto community expects these coins to extend gains in the coming weeks and months, partly because of expected institutional capital, projected to be in their billions, flowing to the sphere.

According to IntoTheBlock data, cumulative fees collected in Bitcoin this week stand at $43.8 million, up 61%. On the other hand, $83.3 million in fees has been accrued from Ethereum. 

Bitcoin and Ethereum transaction fees rising | Source: IntoTheBlock on X

Looking at the historical transaction fees trend, transacting on Ethereum, despite its relatively high transaction processing speeds (TPS), is more expensive than Bitcoin. This can be due to Ethereum’s role in decentralized finance (DeFi), non-fungible token (NFT) minting, and more. Bitcoin is a transactional layer and doesn’t inherently support smart contracts.

Usually, rising on-chain transaction fees are bullish for price and indicate that their respective ecosystem is thriving from increasing adoption. With transaction fees rising in the two leading blockchain ecosystems, more people want to interact with the project. Subsequently, this could support prices since BTC or ETH is used for paying transaction fees. 

Will BTC Ease Past 2021 Highs Of $70,000?

As BTC is currently trading above $43,500 and ETH recently broke above $2,300, the possibility of these coins retesting and easing past their all-time highs of $70,000 and $4,800, respectively, cannot be discounted. One of the key drivers of the surge in on-chain activity is the ongoing bull market.

Bitcoin price trending upward on the daily chart | Source: BTCUSDT on Binance, TradingView

With crypto rising, more people are looking to position themselves, hoping to profit from further price appreciation. This wave of fear of missing out (FOMO) has pushed higher fees and prices.

The demand for liquid and SEC-recognized digital assets will likely increase once the Securities and Exchange Commission (SEC) goes ahead and authorizes the first Bitcoin ETF. This derivative product will allow institutions to invest in Bitcoin confidently through a regulated solution. 

As the odds of the SEC approving this product rose from early Q4 2023, BTC and ETH prices started rising in sync. Still, how prices will react once the spot Bitcoin ETF is approved remains to be seen. Once the SEC green-lights a spot Bitcoin ETF, the crypto market will begin looking at Ethereum and whether the agency will approve a similar solution.

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2 Reasons Why An Ethereum Mega Bull Run Is Inevitable

While the recent Bitcoin and crypto momentum is cooling off, Ethereum (ETH) rejects lower lows, especially against Bitcoin (BTC). Taking to X on December 8, decentralized finance (DeFi) researcher DefiIgnas shared insights that suggest ETH could be on the verge of a rally that would potentially see the second most valuable coin usurp BTC’s current position as the best-performing asset. 

Reasons That Might Drive Ethereum Bulls

The researcher observed that ETH is down 24% versus BTC in 2023. However, multiple fundamental indicators show that this is about to change. First, DefiIgnas noted that crypto investors are increasingly drawn to discounted Grayscale Ethereum Trust (GETH), which has been rallying over the past few months, outperforming Ethereum spot prices. 

GETH surged by 298% in the past few months, while ETH only rose by around 100% in the same period. As GETH share prices increased, its discount with spot ETH decreased. This means more capital indirectly flowed into ETH, leading to higher demand.

Money flowing into GETH | Source: @DefiIgnas on X

Besides GETH rising, the researcher remains bullish on Ethereum because of the recent developments surrounding the approval of the first spot Bitcoin ETF. The crypto community expects the Securities and Exchange Commission (SEC) to authorize multiple products, including those proposed by Fidelity and BlackRock.

In DefiIgnas’ assessment, once the spot Bitcoin ETF goes live, likely in early 2024, all “attention, narrative, and speculation” will shift toward the agency approving the first spot Ethereum ETF. BlackRock, the world’s largest asset manager, has already applied with the SEC to issue the first spot Ethereum ETF.

The expected activation of the Cancun upgrade in H1 2024 will also likely support Ethereum prices. Over the years, Ethereum has integrated multiple upgrades. This includes shifting to proof-of-stake (PoS) from proof-of-work (PoW) and overhauling their fee auction mechanism, introducing ETH burning.

However, with Cancun, the goal is to directly enhance the main net’s capabilities by activating several proposals, including EIP-4844 proto-dank sharding, which aims to reduce gas fees associated with rollups. This update will further cement Ethereum’s quest to significantly increase on-chain scalability and reduce gas fees over the years.

ETH Looks Firm, Resistance At November Highs

At spot rates, ETH is firm versus BTC, looking at the candlestick arrangement in the daily chart. How prices react in the days ahead remains to be seen.

ETHBTC price trending upward on the daily chart | Source: ETHBTC on Binance, TradingView

Even so, if there is confirmation of the December 7 gains, ETH might extend gains. In that case, it can break above the current consolidation as bulls aim to break above November 2023 highs of around 0.058 BTC.

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Ethereum Price Soars To Over $2,300 – Is $3,000 Next?

The market performance of Ethereum has been steadily rising since October, marking a positive and long-lasting trend. Increased buying activity has been the main driver of this positive momentum that has persisted over time, pushing the cryptocurrency beyond the vaunted $2,000 resistance mark and igniting a continuing rally.

The value of Ethereum has sharply grown as a direct result of this increased demand and market optimism, with its sights set on breaking through the crucial resistance region at $2,300. This upward trend serves as another evidence of the increasing investor trust and general bullishness surrounding Ethereum, thereby solidifying its place in the changing cryptocurrency market.

Ethereum Hits 18-Month Highs, Targets $3,000

Ethereum, the second-largest cryptocurrency in the world, is rising quickly and has reached levels not seen in the previous 18 months. With a market valuation of $285 billion, ETH is now trading 5.7% higher at $2,375 as of the time of publication. Some speculators have even shared $3,000 price predictions for ETH amid the latest market breakout.

Ethereum’s approaching resistance level poses a huge challenge to buyers of the altcoin, including the fixed barrier at $2.5K, which has frequently shown to be a significant roadblock. But if the market is able to recapture this critical area, Ethereum may go on to reach the $2.5K – or even $3.000 — in the future.

As Ethereum breaks down further obstacles, investors and market watchers are keeping a close eye on the situation. A notable indication of the increased interest from institutional investors is the eagerness with which major players like VanEck, BlackRock, and Grayscale are awaiting clearance for Spot Ethereum ETFs.

According to Santiment, an on-chain data service, Ethereum has reached $2,349, its highest price since June 2022. The amalgamation of the positive long-term trend indicating a rise in wealth for the leading non-exchange whale wallets and a decrease in sell-off power for the leading exchange whale wallets presents a propitious situation for a steady upward trend.

Ethereum’s Non-Exchange Holdings Surge To 55M ETH

A recent tweet from Santinment highlights some intriguing variations in Ethereum’s wallet mechanics. Exchange wallets saw a five-year low of 9.3 million ETH, while top non-exchange wallets are building up to a record 54.6 million ETH. This move points to upward trends, with wealth building through non-exchange transactions and decreased selling pressure.

Over the course of two months, a bearish divergence between the price and the RSI indicator grew, pointing to a possible overvaluation of Ethereum at this point. Given the current characteristics of the market, even if buyers seem to be in charge and overall sentiment is bullish, there is a significant likelihood of a brief corrective phase that involves consolidation and higher volatility in the near future.

Meanwhile, a recent ACDE meeting provided information about the impending Dencun fork of Ethereum, which is set to occur in January 2024. The Goerli network testnet fork was well-prepared for by development teams, opening the door for a larger Goerli shadow network fork in the coming weeks.

By using proto-danksharding, Dencun is expected to greatly increase data availability for layer-2 rollups. This improvement should result in lower rollup transaction costs, which will eventually help end customers.

Dencun’s overall effects include rollups that increase Ethereum’s scalability, gas fee optimization, improved network security, and the deployment of several housekeeping upgrades.

As Ethereum’s price surges to surpass the $2,300 milestone, speculation intensifies about the cryptocurrency’s potential to reach the next significant threshold of $3,000. The recent upward trajectory reflects the market’s confidence in Ethereum’s underlying technology and its role in the evolving digital landscape.

(This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).

Featured image from Shutterstock

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Avalanche Pays Premium to Incentivize Validators, Will AVAX Soar To $145?

Avalanche, the fourth-generation proof-of-stake (PoS) blockchain, incurs significant costs to incentivize its validators. Token Terminal data on December 7 shows that in the past year, the smart contract platform paid over $275 million in AVAX to compensate its validators despite generating only $11.5 million in user fees. 

Avalanche Is Paying A Premium To Incentivize Validators

Although it appears that Avalanche is paying a premium for validators, this is critical in securing the network and ensuring all transactions are confirmed. Overall, and being a proof-of-stake network reliant on node operators for security and decentralization, Avalanche’s decision to pay validators a premium is, as its users demand, to maintain a robust network of nodes. 

According to CoinMarketCap data, the network has a market cap of over $9.8 billion. It is currently in the top 10 by liquidity, surpassing Polygon and Polkadot, competing low-fee alternatives. As it is, by incentivizing validators with generous rewards, Avalanche ensures that there is a strong pool of nodes available to maintain the network’s operation.

Through these validators, AVAX holders can stake and receive rewards. As of December 7, there are over 1,539 validators currently staking over 248 million AVAX and earning 7.84% APY. At the same time, statistics show that Avalanche has a staking ratio of 57.11%. Most AVAX in circulation are used to secure the network at this level.

Avalanche validators | Source: Avalanche.network

While AVAX incentivization might draw more validators, Avalanche documentation also states that the network doesn’t require complex hardware to operate a node. At the same time, the blockchain, unlike Ethereum, states that staked AVAX is not at risk of being slashed–or penalized by the network–provided all network requirements are met. This feature could explain the steady rise in validator count over the past three years.

Validator client count | Source: Avalanche.Network

AVAX Is Up By 200%, Trading At 2023 High

While Avalanche grows its validator count, AVAX prices have also been expanding steadily, mirroring the general market. Thus far, AVAX is changing hands above $26, up over 200% in the last three months. At spot rates, AVAX is trading at new 2023 highs and in a bullish breakout formation, looking at price action in the daily chart.

Avalanche price trending upward on the daily chart | Source: AVAXUSDT on Binance, TradingView

Related Reading: Apollo Crypto Predicts Bitcoin Price Of $200,000 This Cycle, Here’s Why

Looking at how AVAX is, bulls might break above $30. If the accompanying surge is with expanding trading volume, it might be the base for another leg up that might lift the coin toward $90 or higher in the sessions ahead. When AVAX peaked in 2021, it rose to as high as $145.

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Ethereum Whale With Over $60 Million In Unrealized Profits Moves Coins To Exchange

A dormant Ethereum whale has resurfaced, moving their 39,260 ETH worth approximately $87.5 million. According to data from Lookonchain, this Ethereum whale with almost $90 million in ETH recently woke up and decided to move its mountain of digital assets to an exchange. 

Although it is unclear the motive behind this transfer, it appears to be to take profit on a 670% gain over the past five years. 

Ethereum Whale Moves 39,260 ETH To Crypto Exchange

The crypto market has had another flurry of price increases in the past few days, with Coinmarketcap’s Fear & Greed Index now pointing to an extreme greed of 81. Ethereum hasn’t been left out of the price gains, and the crypto is currently up by 11% in a 7-day timeframe. 

Amidst the price gain, a social media post by on-chain analysis tracker Lookonchain shows that a whale recently deposited 39,260 ETH worth $87.5 million to the crypto exchange Kraken. Further details from on-chain data show that the coins were acquired around June to August 2017. 

During this period, the whale address received 47,260 ETH acquired at an average price of $240 and worth $11.34 million in total at the time. However, the account has remained largely inactive since then, sitting on unrealized profit as Ethereum continued to grow in price. But now, the coins have made their way into Kraken.  

The massive transfer of funds from a whale’s wallet to an exchange typically signals them cashing out some or all of their holdings. In this particular case, the whale would make a profit of approximately $78 million if they decided to sell all their holdings on the exchange. 

Trend Of ETH Profit Taking Increasing?

A massive transfer of funds naturally leads to speculation within the crypto community, and there seems to be an increasing trend of large ETH holders taking profits. Other social media posts from Lookonchain over the past few days have shown similar cases of large wallets sending their ETH to exchanges. 

For instance, a recent post showed the movement of ETH in wallet addresses belonging to defunct exchanges FTX and Celsius. FTX deposited 3,143 ETH worth $7.2 million on Coinbase, while Celsius sent 7,500 ETH worth $17.2 million to address “0xc450.” 

Galaxy Digital followed suit, depositing 9,179 ETH worth $20.9 million to Binance. According to Whale Alerts, 16,944 ETH worth $38.14 million also made its way to Coinbase from a private wallet.

Even though Ethereum briefly touched $2,300 yesterday, it would seem the recent transfer to exchanges has had an effect on the price of ETH, as the crypto is trading at $2,269 at the time of writing, down by 1.5%. 

The crypto market remains largely unpredictable, but it would be prudent to wait to see if the crypto approaches and rebounds at the $2,200 resistance level. At the same time, a strong blast above $2,300 could signal bulls are still in control.

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Solana Dominates Ethereum In Daily Active Wallets, SOL Back To $140?

Solana (SOL), the fourth-generation blockchain, has staged a remarkable comeback, looking at on-chain metrics. Citing Artemis data, Step Data Insights on X noted that Solana’s daily active wallets flipped Ethereum’s, the pioneer smart contract platform. This development is when SOL prices have been ripping past resistance levels in the past few months.

Solana’s Resurgence Continues, Daily Active Wallets Flips Ethereum

According to Step Data Insights, Solana’s daily active wallets currently hover at around 400,000, slightly edging past Ethereum’s. This spike in activity suggests that Solana is attracting a growing user base, and more people are keen to explore its ecosystems, comprising DeFi, NFTs, and other protocols. 

Solana daily active wallets | Source: Artemis via Step Data Insights

Additional data from Artemis shows that Solana also eclipses Ethereum in the number of daily transactions. Although Ethereum leads in DeFi total value locked (TVL), Solana’s low fee and scalable environment could explain why users opt for this high-performance network.

Overall, the Solana recovery could triggered by recent favorable price action in Q4 2023. To quantify, Step Data Insights notes that SOL has risen by over 210% in the past three months. During this time, ETH’s gains have capped. 

The analytic platform states that the coin only rose by 39%. To illustrate, in the last three months, SOL rose from around $17 to peak at approximately $70. Meanwhile, ETH expanded from roughly $1,500 to peak at about $2,300, recorded on December 6.

This recovery points to increasing investor confidence. However, time will tell whether SOL will extend gains in the sessions. From the daily chart, prices have been moving horizontally for the better part of H2 November to early December 2023. 

Solana price trending upward on the daily chart | Source: SOLUSDT on Binance, TradingView

The immediate resistance line is at $70. With the SOL moving inside a bull flag, any upswing above November 2023 highs will be the building block for a possible leg-up that will lift SOL to April 2022 highs of $140.

Spot Bitcoin ETF Hopes, Firedancer Lifting Solana

Altcoins, including Solana, have been racing higher as the crypto market recovers. Following a court ruling, SOL is relatively firm despite the FTX estate being permitted to liquidate the coin in the secondary markets to repay creditors. 

Hopes of the Securities and Exchange Commission (SEC) approving the first Bitcoin ETF have also benefited Solana. However, the recent release of Firedancer, a validator client developed by Jump Crypto, on testnet has supported SOL. 

The client will make the network more resilient and performant. Firedancer will go live in the H1 2024. Once it goes live, the new client is expected to improve Solana’s reliability. 

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Ethereum Price 2023 Breakthrough: Surpassing Bitcoin, Altcoin Surge Next?

For the first time in 2023, the Ethereum price has outperformed Bitcoin across several metrics, hinting at a fundamental shift in market structure. The second cryptocurrency by market capitalization follows the general sentiment in the sector, setting new yearly highs.

As of this writing, the Ethereum price trades at $2,300 with a 4% profit in the last 24 hours. Over the previous week, the cryptocurrency recorded a 10% profit, with most of the altcoin sector still lagging the current price action.

Ethereum Price ETH ETHUSDT

Ethereum Price Signals Strength For Altcoin Sector?

A report from BlockScholes posted by the options platform Deribit indicates a spike in the Ethereum price volatility back to its levels above Bitcoin’s. ETH’s shift in market structure hints at traders and institutions gearing up for early 2024.

The report claims that the potential approval of a spot in the US ETH Exchange Traded Fund (ETF) is behind the current price action. This new dynamic suggests that the bullish sentiment above this event slipped from Bitcoin to Ethereum.

As seen in the chart below, Ethereum records a higher return than Bitcoin for the first time since July 2023. The surge in returns, BlockSholes said, allowed ETH to buck a persistent downtrend, but overall, the cryptocurrency’s performance remains in its yearly range.

Ethereum price ETH ETHUSDT chart 2 BS

In other words, the Ethereum price is doing better than in other periods across 2023 but has yet to resume a bullish momentum concerning Bitcoin. However, the report noted:

This reversal is not yet strong enough for us to be confident in a return to the market structure that we had previously come to expect, but does indicate that the effects of speculative bets around the application of a spot ETF are not limited to BTC. This is echoed by the implied volatilities for both assets across the term structure, which forecast similar volatility levels for both assets.

What Favors An Altcoin Rally

In addition, the report noted a decline in the US dollar as measured by the DXY Index. Risk assets can thrive as the currency trends lower, potentially hinting at a loose monetary policy by the Federal Reserve (Fed).

If Ethereum continues gaining bullish momentum from its current levels, the entire altcoin sector could see further profits. The report indicates that most entities and traders are pricing in a “risk event” by the end of January 2024.

Thus, Bitcoin and Ethereum may see a more significant rally by that time. Whichever coin prevails might reveal more information on the subsequent trend; if Ethereum outperformed, then altcoins are more likely to follow.

Cover image from Unsplash, chart from Tradingview

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Bloomberg Experts Forecast Timeline For Spot Ethereum ETF Approval

The journey towards the approval of an Ethereum ETF in the United States has seen a new development yesterday as the US Securities and Exchange Commission (SEC) has announced a delay in the decision for Grayscale’s Ethereum trust conversion into a spot Exchange Traded Fund (ETF). The SEC has stated the need for an extended period to evaluate the proposed rule change, pushing the new deadline Grayscale to January 25, 2024.

In its reasoning, the SEC has reiterated, “The commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein.” Notably, the delay comes at a time where the US agency is working with now 13 spot Bitcoin ETF applicants on presumably the final amendments before a January 10 approval.

Timeline For A Spot Ethereum ETF Approval

Despite the latest delay, the crypto community remains optimistic about the future of spot Ethereum ETFs. Bloomberg ETF analyst James Seyffart has suggested that delays are par for the course, tweeting, “Update: As expected Grayscale’s Ethereum trust filing just got delayed. It was due by 12/6/23 so this is completely normal.”

Seyffart also shared a table of all seven spot Ethereum ETF applicants: VanEck, 21Shares & ARK, Hashdex, Grayscale, Invesco & Galaxy, BlackRock, Fidelity and their deadlines. He further hinted at potential approvals by mid-2024, responding to criticisms from Adam Back, CEO of Blockstream, with “Unfortunately I think you’re gonna be really upset by June of next year.”

Spot Ethereum ETF timeline

In response to queries about the probability of an Ethereum ETF approval following a Bitcoin ETF, Eric Balchunas of Bloomberg has indicated that the first filers, Ark and VanEck, have strong odds of approval by their final deadline on May 23, 2024, as they are expected to use the same mechanics as spot Bitcoin ETFs, and due to the fact that Ether futures have already received the green light from the US SEC.

Queried about for the odd of a spot Ethereum ETF approval, he remarked, “Not formally yet, but final deadline for the first filers Ark and VanEck is May 23rd so strong odds they approved by then given they’d be using same design as btc etfs and ether futures were Ok’d.”

The Next Deadlines

The table by Seyffart shows that the next Ethereum ETF deadlines are from December 23 to 26 for VanEck, Ark Invest and Invesco & Galaxy, followed by Hashdex on January 1. Since a spot Bitcoin ETF is very unlikely to be approved by then, delays by the SEC are more than likely for this batch of filings.

Both iShares by BlackRock and the Fidelity Ethereum Fund have their next deadlines on January 25 and January 21, 2024 respectively. These dates are crucial as they could involve either an extension, a request for more information, or a final decision.

But things only get really tense towards the final deadlines for all Ethereum ETF filers, as outlined by both Bloomberg ETF experts. With VanEck poised for May 23, 2024, and ARK Invest for May 24, 2024 and other notable filers like Hashdex Nasdaq Ethereum ETF and Grayscale’s Ethereum Trust Conversion (ETHE) scheduled for decisions by May 30, 2024, and June 18, 2024, respectively, the timeline for potential approvals is taking shape.

At press time, ETH traded at $2,271.

Ethereum price

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Ethereum Price Prediction- After 10% Surge, Is ETH Rally Just Getting Started?

Ethereum price extended its rally above the $2,250 resistance. ETH is up over 10% and might continue to rise toward the $2,500 resistance.

  • Ethereum is showing positive signs and recently surpassed the $2,300 resistance.
  • The price is trading above $2,250 and the 100-hourly Simple Moving Average.
  • There is a major bullish trend line forming with support near $2,250 on the hourly chart of ETH/USD (data feed via Kraken).
  • The pair could extend its rally if it clears the $2,320 resistance zone.

Ethereum Price Extends Rally

Ethereum price remained in a positive zone above $2,120, like Bitcoin. ETH extended its rally above the $2,200 and $2,250 resistance levels. The bulls remained action and the price spiked above $2,300.

A new multi-month high was formed near $2,316 and the price is now correcting gains. There was a move below the $2,300 level. The price is now testing the 23.6% Fib retracement level of the upward move from the $2,188 swing low to the $2,316 high.

Ethereum is now trading above $2,250 and the 100-hourly Simple Moving Average. Besides, there is a major bullish trend line forming with support near $2,250 on the hourly chart of ETH/USD.

Ethereum Price Prediction

Source: ETHUSD on TradingView.com

On the upside, the price is facing resistance near the $2,320 zone. The next key resistance is near the $2,350 level. A clear move above the $2,350 zone could send the price toward the $2,420 level. The next resistance sits at $2,450. Any more gains could start a wave toward the $2,500 level.

Are Dips Supported in ETH?

If Ethereum fails to clear the $2,320 resistance, it could start a downside correction. Initial support on the downside is near the $2,265 level.

The next key support is $2,250 and the trend line. It is near the 50% Fib retracement level of the upward move from the $2,188 swing low to the $2,316 high. The main support is now near $2,200 or the 100-hourly Simple Moving Average. A downside break below $2,200 might start an extended decline. The key support is now at $2,120, below which there is a risk of a move toward the $2,080 level in the near term.

Technical Indicators

Hourly MACD – The MACD for ETH/USD is gaining momentum in the bullish zone.

Hourly RSI – The RSI for ETH/USD is now above the 50 level.

Major Support Level – $2,200

Major Resistance Level – $2,320