Ethereum (ETH) Price Rebound Phase Begins -All Eyes on $2,500

Ibrahim Ajibade
Published: Jan 27, 2024, 10:48 GMT+00:00

Ethereum (ETH) price came close to losing the $2,200 support but exchange supply trends suggest a rebound phase to $2,500 is imminent. 

Ethereum (ETH) Price Analysis

Key Insights:

  • Ethereum (ETH) price came close to losing the $2,200 support but exchange supply trends suggest a rebound phase to $2,500 is imminent. 
  • In the last two weeks between Jan 14 and Jan 28, investors have shifted 330,000 ETH for supply on exchanges and trading platforms. 
  • Historical trends show that ETH holders have shown a preference to buy large volumes of ETH around the $2,400 area. 

Ethereum (ETH) price came close to losing the $2,200 support but bulls staged a major rebound during the late trading hours on Friday, Jan 26, sending ETH toward the $2,300 mark.

Looking beyond the price charts, the exchange supply trends suggest an ETH price rebound phase to $2,500 is imminent.

Ethereum Exchange Supply Falls by $750M in 2 Weeks 

Ethereum has been subject of positive speculation this week, as talks of a potential ETH ETF grows louder. While corporate entities continue to make large acquisitions behind the scenes, on-chain data trends show that the positive disposition is spreading across to retail investors as well.

Notably, Ethereum has recorded a steady decline in exchange reserves in the last two weeks, which appears to have been instrumental to the latest price bounce. 

As the volumes of whale transactions on the Ethereum network rose in recent weeks, its has also coincided with a rapid decline in supply deposited on exchanges. 

Ethereum (ETH) Supply on exchanges vs. Price | Source: Santiment
Ethereum (ETH) Supply on exchanges vs. Price | Source: Santiment

As of January. 14, Ethereum supply on exchanges stood at 10.74 million ETH. But interestingly, those balances have dropped sharply to 10.41 ETH the time of writing on Jan 27.

This essentially implies that Ethereum investors have shifted 330,000 ETH worth approximately $750 million from exchanges and trading platforms into long-term storage or staking contracts. 

The dominant preference for long-term holding and passive income staking among current ETH holders is a bullish signal for strategic investors.

It suggests that confidence in the short-term price prospects and long-term viability of the Ethereum ecosystem.

Notably, Ethereum exchange supply has been in a downtrend since the Proof of Stake (PoS) transition in May 2023, a move that has coincided with an extended period of price uptrend. 

Ethereum price forecast: All Eyes on $2,500

Based on the on-chain signals analyzed above, ETH holders are showing strong preference to HODL or stake for passive income to tide over long periods weakening market demand.

Combined with whale investors looking to buy Ethereum ahead of the looming spot ETF verdict from the US SEC, ETH price could enter a rebound phase in the short-term.

IntoTheBlock’s Global In/Out of Money data also alludes to this bullish ETH price forecast. It shows that investors have shown preference to accumulate Ethereum around $2,400.

Currently, 3.2 million existing holder addresses acquired 6.49 million ETH at the average price of $2,394. If the accumulation wave kicks in again, it will likely  trigger a breakout above $2,500.

Ethereum (ETH) Price Forecast | Source: IntoTheBlock
Ethereum (ETH) Price Forecast, 2024 | Source: IntoTheBlock

But on the flipside, that accumulation zone could form a major sell-off resistance if the bullish momentum weakens and holders opt to book profits. In this scenario, the bulls can rely on the $2,100 support buy-wall to hold off the bears.

About the Author

Ibrahim Ajibade Ademolawa is a seasoned research analyst with a background in Commercial Banking and Web3 startups, specializing in DeFi and TradFi analysis. He holds a B.A. in Economics and is pursuing an MSc in Blockchain.

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