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The current price of Ethereum remains stagnant, trading within a narrow range of $400, with resistance levels at $2,300 and $2,800. While investors anticipate a bullish trend in the near future, the market is still plagued with uncertainty.
Ethereum’s Support at $2,300: Over 52 Million ETH Acquired
Ethereum, the second most valuable cryptocurrency, has experienced a bearish trend, dropping by more than 50% from its peak in July and struggling to surpass the resistance at $3,500. As traders closely monitor the price movements, one analyst has highlighted a significant development based on market data.
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According to data from IntoTheBlock on October 11, the analyst noted that traders have accumulated over 52 million ETH around the $2,300 price level. This accumulation indicates that $2,300 serves as a strong support level for Ethereum.
Therefore, if buyers manage to push the price above this level, it will serve as a foundation for an upward trend. However, if selling pressure intensifies, there is a risk of Ethereum dropping below the lows seen in the third quarter of 2024.
Currently, market sentiment is bearish, with over 65% of Ethereum holders and traders anticipating a challenging period in the short term.
Therefore, the price action at the local support level will determine the short to medium-term trajectory. A breakthrough above $2,800 is crucial for generating demand and boosting optimism among traders.
Declining Market Capitalization of USDT, USDC, and Stablecoins
Despite the positive outlook, recent market data indicates weakness in related areas. The market capitalization of stablecoins like USDT and USDC has been decreasing over the past few weeks. As of October 10, the analyst observed a $780 million drop from recent highs, suggesting a potential decline in buying power.
Typically, an increase in the movement of USDC, USDT, and DAI to centralized exchanges indicates a growing interest in purchasing cryptocurrencies like Ethereum and Bitcoin. However, a decrease in market capitalization may signal caution among users, leading to a more conservative approach.
Inflows of stablecoins to centralized exchanges often precede a market-wide correction, highlighting the importance of monitoring these trends.
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Currently, there is no significant movement of ETH to centralized exchanges, but there has been a rise in staking activities. Recent data shows that over 34 million ETH are locked in staking contracts, offering holders a 3.3% annual percentage yield.
Image source: DALLE, chart source: TradingView