Key Reasons Behind Ethereum Price Delay for $4,000 Rally

by

As a seasoned crypto investor with a decade of experience under my belt, I’ve seen the highs and lows of this exciting yet volatile market. The recent surge in Ethereum’s price has been quite promising, but as someone who’s learned the hard way not to get too carried away by short-term gains, I remain cautiously optimistic about ETH reaching $4000.

The Ethereum price bounced from $2220 to $2550 in the last two weeks, registering a 15.3% growth. The bullish narrative largely followed the market speculation for the U.S Fed interest rate, replenishing investors’ interest in risky assets like cryptocurrency. But will the macroeconomic factor be enough to push ETH value past $4000?

Key Factors Holding Back Ethereum Price Surge to $4,000

This week, the cryptocurrency market experienced an increase in bullish trends after the U.S. Fed reduced interest rates by 0.5%. The renewed appetite for risky investments has boosted the prices of Bitcoin, Ethereum, and other major altcoins, potentially causing a shift in their overall trajectory. Nevertheless, it may be challenging for the price of Ethereum to sustain a rally towards $4000 because of several factors:

    ETH/BTC Pair Hits 40-Month Low as Bitcoin ETF Flows Outperform
    Ethereum Foundation’s Ongoing ETH Sales Fuel Bearish Sentiment
    Rising ETH Supply on Exchanges Fuels Fears of Potential Sell-Off

ETH/BTC Pair Hits 40-Month Low as Bitcoin ETF Flows Outperform

As an analyst, I’ve been closely monitoring the market trends, and a recent observation stands out: The ETH/BTC pair has dipped to levels not seen in 40 months, indicating that Ethereum isn’t keeping pace with Bitcoin as effectively as it once did. Interestingly, while Bitcoin-focused Exchange Traded Funds (ETFs) continue to attract positive flows, Ethereum ETFs have experienced substantial outflows. This trend implies that institutional investors are leaning towards Bitcoin’s perceived stability over Ethereum’s higher volatility and risk profile in terms of potential returns.

If the current pattern persists, it’s possible that the Ethereum token might find it tough to initiate a strong surge and may instead go through an extended period of stability.

ETH is trading at its lowest level against BTC in over 40 months
In contrast to Bitcoin Exchange Traded Funds (ETFs), which have seen primarily inflows of funds, Ethereum’s ETFs have predominantly faced outflows. This pattern indicates that institutional investors are preferring the perceived stability of Bitcoin over Ethereum’s potential for higher risk and potentially greater rewards.
— IntoTheBlock (@intotheblock) September 20, 2024

Ethereum Foundation’s Ongoing ETH Sales Fuel Bearish Sentiment

One way to rephrase this information in a more natural and easy-to-read manner could be: “The Ethereum Foundation’s continuous selling of ETH plays a significant role in the coin’s price fluctuations. According to Lookonchain data, they sold 300 ETH on Friday, amounting to roughly $763,000. Since the beginning of January, the Foundation has offloaded a total of 3,466 ETH (approximately $9.67 Million) at an average price of around $2,791 per ETH.

On average, the Foundation conducts a sale approximately every two weeks, with an average transaction value of 151 ETH (equivalent to $421K). These substantial sales often indicate a conservative perspective on upcoming price trends. However, the wallet connected to the Ethereum foundation seems to be strengthening the pessimistic viewpoint regarding the market.

The #Ethereum Foundation sold 300 $ETH($763K) again 4 hours ago!
Starting from January 1, 2024, the Ethereum Foundation has made a total of 3,466 Ether transactions, which amounts to approximately $9.67 million. On average, they’ve sold one batch of Ether every 11 days, with each sale accounting for about 151 Ether, or around $421,000.
Address:…
— Lookonchain (@lookonchain) September 20, 2024

Rising ETH Supply on Exchanges Fuels Fears of Potential Sell-Off

Based on data from Santiment Analytics, there’s been a consistent increase in the amount of Ethereum held on exchanges, now totaling approximately 21.46 million coins. This surge towards exchanges could indicate an increased likelihood of selling, potentially curbing the asset’s growth potential due to the potential for higher supply on the market.

In simpler terms, if short-term Ethereum holders decide to cash out during this recent recovery, it might postpone Ethereum’s price reaching $4000.

Key Reasons Behind Ethereum Price Delay for $4,000 Rally

ETH Price 10% Away from Major Reversal or Breakout

At the current moment, Ethereum (ETH) is being traded at approximately $2,555, with a total market value of around $307.6 billion. If the overall market recovery continues, there’s potential for ETH to increase by another 10%, potentially reaching the resistance level of $2,800. The current resistance and the 200-day exponential moving average provide an opportune spot for sellers to regain their bearish momentum.

If the resistance above persists strongly, the value of Ethereum may fall back and attempt to break through the $2,000 level again as a potential support.

Key Reasons Behind Ethereum Price Delay for $4,000 Rally

Instead, if we observe a strong push beyond the $2800 mark, it will enhance the holders’ control of this asset and potentially propel a surge towards $3,000.

Read More

2024-09-21 16:02