Ethereum (ETH) kicked off trading at $3,140 on April 25, signaling the potential start of a recovery phase for the pioneering smart-contract platform. Analyzing on-chain data trends, it appears that how ETH investors react to the recent Bitcoin halving could play a crucial role in the next market rally.
Could Ethereum Price Reach $3,500 Again?
In just five days, investors have staked approximately $620 million worth of ETH. This comes after the Bitcoin network underwent its fourth halving on April 20, resulting in significant volatility across the global cryptocurrency markets as investors sought to capitalize on potential gains from this landmark event.
Since the Bitcoin halving, Ethereum’s price has struggled to gain momentum due to decreasing market liquidity and cautious sentiment among short-term swing traders. However, intriguingly, on-chain data trends suggest that Ethereum node validators have become more optimistic.
The following chart displays official real-time data on the changes in the number of ETH coins deposited in Ethereum’s Proof-of-Stake (PoS) Beacon Chain smart contracts.
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Following the Bitcoin halving on April 20, the total staking deposits on the Ethereum Beacon Chain amounted to 31.6 million ETH. Interestingly, investors have since staked an additional 300,000 ETH, bringing the total stake to 31.9 million ETH as of April 25.
Increasing the number of staked coins not only enhances the security of the Ethereum network, as is the case with any PoS network, but it also reduces short-term market supply. During periods of slow market demand, this reduction could be crucial in alleviating sell-side pressure.
Considering current prices, the value of the staked coins amounts to over $620 million within just five days of the Bitcoin halving. Undoubtedly, this has played a pivotal role in helping ETH price maintain the $3,000 support level in recent days.
ETH Price Forecast: A Challenging Path to $3,500
Although temporary, the withdrawal of $620 million worth of ETH from the immediate market supply by node validators positions Ethereum’s price to consolidate above $3,000 as the bulls prepare for another attempt at reaching $3,500.
However, to reclaim $3,500, the In/Out of the Money chart from IntoTheBlock below demonstrates that ETH must first overcome the significant sell-wall at the $3,250 level.
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As depicted above, 2.1 million addresses hold 4.58 million ETH with an average purchase price of $3,236. If these holders decide to sell at their break-even point, the ETH price could face significant resistance and struggle to surpass the $3,250 mark in the near future.
If Ethereum stakers continue to deposit more coins into the Beacon Chain, the bulls could take advantage of the reduced market supply and achieve a decisive breakout above $3,500.
However, in the event of a bearish reversal, ETH could potentially fall as low as $2,918 before finding a strong support cluster.
Disclaimer: This content is for informational purposes only and should not be considered financial advice. The opinions expressed in this article are solely those of the author and do not reflect the stance of The Crypto Basic. Readers are advised to conduct their own research before making any investment decisions. The Crypto Basic holds no responsibility for any financial losses incurred.