Ethereum’s price remains resilient at $3,800 despite a decrease in investor enthusiasm ahead of the upcoming US non-farm jobs data. However, an analysis of on-chain data reveals a rare bullish signal that could potentially ignite the next rally.
The US Bureau of Labor Statistics is set to release its monthly non-farm jobs data on May 31. This data is a crucial macroeconomic indicator that influences how regulators and investors perceive changes in inflation and overall economic activity. If there is a decline in non-farm jobs, it could prompt the Federal Reserve to consider cutting interest rates, and vice versa.
As the release of the report approaches, strategic crypto investors have reduced their trading activity, causing the Ethereum market to enter a consolidation phase over the past 24 hours. This has halted the week-long uptrend that followed the approval of the ETH ETF.
From May 21 to May 29, the price of Ethereum experienced a 30% rally, reaching a monthly peak of $3,974. However, between May 29 and May 31, the price retraced 7% and hit a weekly low of $3,698. This suggests that the post-ETF price rally for ETH has entered a pause as crypto investors adopt a more cautious approach in anticipation of the upcoming US macroeconomic data.
Nevertheless, a closer examination of on-chain data reveals that institutional investors on the Ethereum network are still engaging in significant transaction volumes behind the scenes. The average transaction size on the Ethereum network has increased from 1.03 ETH on May 19 to 2.46 ETH as of May 31, representing a 240% surge in the last two weeks. Such a significant increase in average transaction size is a bullish signal, indicating improved sentiment and investor confidence, as well as a substantial growth in market liquidity that may attract new participants.
In terms of price forecast, Ethereum is currently struggling to defend the $3,800 support level. However, if the US non-farm jobs data elicits a positive market response, the surge in transactions could pave the way for ETH to break above $4,500 in June 2024. It is worth noting that during the next phase of the rally, Ethereum may encounter major resistance at $4,200, based on historical buying trends. If the price manages to decisively break above this level, investors can expect new highs above $4,500. On the downside, if ETH fails to hold the $3,700 support level, a decline to $3,560 could be possible.
It is important to note that the information provided in this article is for informational purposes only and should not be considered financial advice. The views expressed are solely those of the author and do not reflect the opinion of The Crypto Basic. Readers should conduct their own research before making any investment decisions, and The Crypto Basic is not responsible for any financial losses incurred.