Ethereum Price Forecast: Can this $1.2B Signal Drive ETH to $4k April 2024 ?

Insights:

Ethereum (ETH) price closed March 2024 at $3,646.8, sealing an 11.8% growth performance for the month. But, market downturn on April 2, has seen ETH surrender a huge chunk of the March gains, dropping 9% as low as $3,215 in the week ended.

On-chain data shows that after enduring a turbulent week recent decline in market supply could set the pace for major ETH price rebound phase in April 2024.

Ethereum Market Supply Falls by $1.2 billion in 2 weeks

In the first 6 days of April 2024, Ethereum price has tumbled 9%, trading around $3,300 at the time of writing on April 6. However, vital market data trends show that investors started to take on a positive disposition again over the past two weeks.

Importantly, on-chain data  shows that amid the ETH price stickiness, Ethereum investors continue to withdraw more coin from the market supply. A move that could trigger bullish price reversal at any moment.

Cryptoquant’ exchange reserves metric tracks the total ETH coins that investors currently have deposited across various crypto exchanges and trading platforms.

As seen in the chart above, investors held a total of 14.36 million ETH in exchange-hosted wallets at the close of March 19. But at the time of writing on April 6, that figure has rapidly by 363,000 ETH, hitting 13.99 million ETH.

When valued at the current prices of about $3,330 per coin, it implies over $1.2 billion worth of liquidity has been pulled from ETH spot markets over the last two weeks.

Going by the cardinal law of demand, this massive decline in ETH market supply, albeit temporarily, puts Ethereum price in a prime position to enter an accelerate rebound phase during the next wave of demand surge in April 2024.

ETH Price Forecast: $3,500 resistance at risk

Drawing inferences from the $1.2 billion signal above, Ethereum price is on track to enter a parabolic rebound towards $4,000 in April 2024. But first IntoTheBlock’s global in/out of the money chart shows the bulls face a formidable short-term resistance at the $3,500.

As depicted below, 3.52 million addresses that acquired 6.14 million ETH will break-even once Ethereum prices approach the $3,535 area. If majority of them opt to exit early, ETH price rally could more downward pressure.

But considering the $1.2 billion decline in short-term market supply, ETH price will likely scale that sell-wall and reach for new heights closer $4,000 territory as the month unfolds.