Connect with us
Active Currencies 13549
Market Cap $2,768,992,349,550.90
Bitcoin Share 49.74%
24h Market Cap Change $-0.12

Ethereum’s [ETH] price might touch $450 before any significant rally, but…

3min Read
Ethereum’s [ETH] price might touch $450 before any significant rally, but...

Share this article

  • An analyst predicted that ETH’s price would touch $450 before seeing any significant rally.
  • On-chain data suggests that the analyst’s position might be misconceived. 
  • The dormancy on the ETH network, however, has to see a reversal for the price to rally in the long term 

According to CrypotQuant analyst Ghoddusifar, Ethereum’s [ETH] price might touch $450 before any significant rally in price takes place. Ghoddusifar found that the leading alt has moved in a parallel channel since 2017. 


Read Ethereum’s (ETH) Price Prediction 2022-2023


According to the analyst, this channel has historically helped determine ETH’s price tops and bottoms. If the theory holds, Ghoddusifar opined that the next target area for ETH’s price would be the $450 region. This price position acted as support for the coin in 2017, 2019, and 2020.

Source: CryptoQuant

Does this hold any water?

With favorable macro conditions, a look at ETH’s performance on the chain revealed that the alt’s price might not decline to touch the $450 price mark before any significant price rally. 

Despite the severe bearishness that has plagued the general cryptocurrency market in the past few months, data from CryptoQuant revealed a consistent decline in ETH’s exchange reserve.

While ETH’s price might have fallen a few times, mirroring the trend in the general market, on-chain data revealed that the rate of sell-offs for the alt continues to decline. 

For example, ETH’s exchange reserve has declined by 21% since the merge. On 15 September, this stood at 24.39 million. As of this writing, ETH’s exchange reserve was 19.24 million. 

Source: CryptoQuant

Conversely, as the amount of ETH held on exchanges falls, the alt’s supply outside of exchanges continues to rise. A spike in an asset’s supply outside exchanges is typically taken as an accumulation trend.

As of this writing, 106 million ETH tokens were located outside of exchanges, data from Santiment showed. Since the merge, this has risen gradually by 4%. 

Source: Santiment

Furthermore, the downtrend in the general cryptocurrency market was exacerbated by the unexpected fallout of FTX, bringing the total losses in the market to over $1.4 trillion. However, investors remain consistent in ETH accumulation.

Per data from Santiment, ETH’s large key addresses have grown in number since the FTX issue started at the beginning of November. Likewise, the count of retail addresses holding between 100 to 100,000 ETH tokens has climbed to a 20-month high. 

Continued accumulation is evidence of persisting conviction amongst ETH holders. As long as macro factors allow it, ETH accumulation growth at this momentum can help drive up its price. 

Source: Santiment

Something has to give

For the price rally to, however, happen, long-held/dormant ETH coins have to change hands. A look at ETH’s Mean Coin Age (MCA) and Mean Dollar Invested Age (MDIA) showed that both metrics embarked on an uptrend following the merge. This indicated that the location of where the ETH investments lie became increasingly dormant. 

In the middle of November, old coins changed hands as FUD caused by the collapse of FTX caused HODLers to send their holdings to self-custody.

However, as the market settled, the MCA and the MDIA resumed their long stretch. This showed that dormancy returned to the market, and this trend has to be reversed for any significant price rally to take place

Source: Santiment

Share

Abiodun is a full-time journalist working with AMBCrypto. He is also a lawyer with over 2 years of experience. With a keen interest in blockchain technology and its limitless possibilities, Abiodun spends his time understanding the technology, building projects, and educating people about it.
Read the best crypto stories of the day in less than 5 minutes
Subscribe to get it daily in your inbox.
Please check the format of your first name and/or email address.

Thank you for subscribing to Unhashed.