After [ccpw id=60415] soared past the $50K milestone, traders eagerly anticipated [ccpw id=60480] to mirror this success by crossing the $3K threshold. This expectation came to a conclusion as Ethereum shattered its two-year peak by breaking the $3,000 milestone, setting off a wave of short liquidations. This breakthrough has triggered bullish outlooks, prompting a rise in Ethereum accumulation by investors who are now gearing up for potential further price surges. Nevertheless, with the increase in profit-taking behavior around that mark and the exit of both long-term and short-term holders near the peak, this led to a steep decline in the ETH price.
Ethereum’s Netflow Becomes Positive
Bitcoin’s value has climbed to $53,000, but Ethereum has outpaced BTC’s gains, reaching $3,000 for the first time in almost two years. These price increases have put highly leveraged traders on alert, leading to total liquidations of around $300 million.
Yet, Ethereum’s price is now undergoing a significant drop as many investors sold their stakes near the $3,000 peak. Notably, Ethereum saw total liquidations nearing $8.6 million, with a substantial $8.5 million of those being buyer liquidations. The week started off on a slower note, but Bitcoin made an aggressive move to $53,000, hitting this level for the first time since late 2021.
Data from IntoTheBlock shows that the Netflow metric for ETH has moved into the positive territory, indicating that the volume of inflows now exceeds that of outflows. This shift points to a rise in exchange reserves, increasing the likelihood of sales and thus exerting downward pressure near resistance levels. The Netflow metric currently registers at +20,470 ETH.
Moreover, the volume of large transactions has doubled recently, jumping from a low of 1.08 million ETH to 2.26 million ETH. This increase signals a rise in activity by major investors or “whales.” In the event of such a market rejection, these whales could lose confidence, potentially triggering a wave of selling pressure that may drive the ETH price down to its immediate support levels.
However, the bullish sentiment continues as ETH’s network is poised for a pivotal enhancement called “Dencun,” scheduled for March. This update is set to deploy “proto-danksharding” to the blockchain, which is expected to boost its performance and lower transaction fees.
A Bloomberg analyst has projected a potential rise in ether’s value to $4,000, drawing parallels with bitcoin’s rally preceding the approval of spot ETFs. On the other hand, TD Cowen and JPMorgan express skepticism; TD Cowen questions the immediate approval of spot ether ETFs by the SEC, while JPMorgan assigns a probability of less than 50% for such approval by May.
What’s Next For ETH Price?
Ether rebounded off the 20-day Exponential Moving Average (EMA), indicating that buyers are attempting to solidify this level as a foundation of support. Consequently, this boosted the buyers’ confidence, enabling them to surpass the immediate Fibonacci retracement levels and break past the $3,000 mark. Currently, the price of ETH stands at $2,948, marking an increase of over 1.1% from the previous day’s value.
Although the price managed to breach the immediate barrier of $3,000, it couldn’t maintain its surge as sellers initiated a pullback. Nonetheless, buyers are keen on maintaining the upward momentum with hopes of driving the price towards the critical resistance level at $3,100. Achieving this could set the stage for a move towards $3,500.
The recent price rejection has plunged the Relative Strength Index (RSI) toward 58, hinting at the possibility of a minor correction or a consolidation phase looming. For a short-term peak to be indicated, sellers would have to send the price below the 20-day EMA.
