Data on Ethereum prices suggests a potential increase above $3.4K

  • Three key Ethereum price indicators indicate that ETH will surge above $3,400.

Between July 1 and July 8, the price of Ether ETH tickers down $3,084 fell 18% to $2,826; however, it has since partially rebounded. It makes sense that investors are unhappy, especially considering that during this time $313 million worth of leveraged long positions were liquidated. Even though the price of $3,100 is still below the previous support level of $3,400, onchain and derivatives measures show that ether traders are gradually regaining their trust.

Exchanges’ supply of ether is still running low

Strong fundamentals point to a likely price bounce soon, even if the spot Ethereum exchange-traded fund (ETF) launch in the US takes longer than anticipated. According to a recent statement made by US Securities and Exchange Commission Chair Gary Gensler, approvals for S-1 filings are anticipated to occur during the summer, which implies before the end of September. But the precise timetable is still unknown, so traders have good cause to stay cautious.

While equivalent spot Bitcoin BTC tickers fell to $57,914, ETFs have witnessed $654 million in inflows over the last three days, raising anticipation for the eventual debut. In the first eighteen months of trade, spot Ethereum ETFs might draw in as much as $15 billion, according to Bitwise’s Chief Investment Officer, Matt Hougan. The analysts believe that the percentage of the supply that is locked in staking and decentralized applications (DApps) will help the price of Ether, even if this estimate is 50% off.

According to Onchain analyst Leon Waidmann, staking and DApps contribute for 40% of Ether’s supply, which is frozen, despite a decline in exchange supply during the previous month. Glassnode data shows that two months ago, deposits on exchanges were 13.34 million ETH, but two months later, they were 12.21 million ETH. Less coins available for trade right now usually indicates that investors are less inclined to sell in the near future.

Total value locked (TVL) on the Ethereum network, which gauges the total amount of deposits in its DApp ecosystem, which includes layer-2 bridges, remains constant at 17.7 million ETH, remained so even a month ago. Given that Ethereum’s average transaction costs are more than $2—much more than those of several of its rivals, like Solana (SOL) and BNB Chain (BNB)—this data both demonstrates resiliency and reinforces the notion of decreased liquidity on currency exchanges.

Increased Ethereum layer-2 activity and healthy ETH derivatives markets

Ethereum’s layer-2 solutions have been helpful to investors looking for lower costs; within the past month, these solutions have witnessed a considerable increase in activity.

Ethereum DApps recorded a volume of $200.9 billion over the last 30 days, but its layer-2 ecosystem grew dramatically. For instance, Arbitrum had a 94% increase in volumes to $52.4 billion, while Blast and Base saw 62% and 57% growth, respectively, to $51.1 billion and $18.4 billion. Conversely, throughout the same period, direct competitors such as BNB Chain and Solana saw an average loss of 27%.

On July 8, when ETH was trading at its lowest points in almost three months, bearish were not too enthusiastic about Ether derivatives. There was no rise in activity for neutral-to-bearish strategies using ETH options, as seen by the demand for call (buy) options being twice as high as put (sell) options.

Data showed a little increase to 0.8 on July 8, which means that 20% less ETH put options were traded than call options. But this indicator returned swiftly to its 7-day average at 0.55, which meant that call options volumes were favored by 85%. The positive momentum is supported by both onchain measures and derivatives, and a possible short-term price gain above the $3,400 resistance is also supported by the decrease of ETH accessible for trade on fiat exchanges.

Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.

Author: Puskar Pande

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