Ethereum price rose to $2,600 to offset the sell-off risks while BTC still sunk below $40,000
ETH risks bearish exposure as Ethereum price rises against falling volumes, but three crucial on-chain indicators suggest a dissenting scenario.
Here’s the reason why Ethereum price can hit $3,000 in the short term despite overvaluation risks
Greg Waisman, CEO of a cross-border payments network Mercuryo, thinks Ether can easily surpass $3,000 after the hard fork. It will bring a more flexible and cheaper fee structure to the Ethereum network and promote adoption.
“The hype buildup concerning the forthcoming London hard fork is not reflective of the current price trend. Ethereum is currently seeing a retracement; it confirms that the sellers are deliberately lowering the price for a post-upgrade price pump”, Waisman stated.
Meanwhile, Ethereum has notched a 12-day winning streak, the longest ever.
“The IOMAP indicator reveals that $ETH is sitting on strong support while facing the last 2 key levels of on-chain resistance on its path to $3k once again. Between $2,598 and $2,753, 1.19m addresses bought 2.03m ETH,” IntoTheBlock tweeted.
According to CryptoQuant, the total Ether reserves on exchanges declined, indicating that fewer traders are interested in exchanging ETH for other assets. Meanwhile, the ETH outflow from those exchanges spiked, illustrating traders’ intention to hold their Ether around the London hard fork event.
Ether reserves and netFlow from crypto exchanges | Source: CryptoQuant
A surge in ETH deposits to its smart contract is also a bullish indicator because it removes the active Ether supply from circulation against a potentially rising demand.
“The increasing Ethereum 2.0 deposits show a big trust in the future potentials of the Ethereum blockchain, which stirs the scarcity of its native token Ether,” Waisman explained. “The situation may impact positively on the coin’s price.”
“With these positive fundamentals, a return back to the previous all-time high of $4,360 in the long term will be a mild ambition price target for Ether.”
The number of unique 32 ETH depositors crosses 4,000 | Source: CryptoQuant
Finally, one of the biggest catalysts for the current run is likely the highly anticipated London hardfork, set to go live on the network on Aug. 4. London contains EIP-1559, which introduces a fee burn on a base amount of the gas used to pay for transactions on the network. Many views EIP-1559 as a potential catalyst for upward price momentum because it adds deflationary pressure to ETH, increasing its scarcity.
Ethereum has achieved its 12th green daily candle in a row. Following the recent crypto market reversal, Ethereum is in bullish mode. At the time of writing, Ethereum price is changing hands at $2,661, a 5% increase in the last 24 hours.
Meanwhile, BTC has yet to break above $40,000 after losing momentum from the $42,400 high. While the good news is that Bitcoin has seen a notable surge in active addresses in the past week of July, with active BTC entities rising 30% from 250,000 to 325,000 active users, but price still has no progress.
Alongside a significant uptick in active Bitcoin users, BTC investors accumulated larger amounts of the cryptocurrency in late July. According to Santiment, the amount of Bitcoin held on addresses storing 100-to-10,000 BTC hit 9.23 million Bitcoin ($364 billion) as of Aug. 1, which is a new all-time high for this group of investors. The previous all-time high took place on April 5, just one week before Bitcoin price broke an all-time high above $64,000.
Addresses holding between 100 to 10,000 BTC | Source: Santiment
“In the last four weeks, these addresses have accumulated approximately 170,000 more BTC. This staggering pace was last matched in late December 2020, right before a massive bull run kicked off in 2021 where prices jumped from $29.0k to $40.8k in the year’s opening week,” Santiment noted.
Meanwhile, the market is at neutral, or 48. It seems to signal that the market situation has stabilized, but it is also a signal that traders are confused about the next move.
Crypto Fear & Greed Index as of August 2 | Source: Alternative.me
The overall cryptocurrency market cap now stands at $1,622 trillion, while Bitcoin Dominance is 46.1%.
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