- Despite a 3% drop in total crypto market cap, Ethereum (ETH) price remains steady around $1,850, with investors staking an additional 1 million ETH this week.
- Aggregate exchange order books indicate a demand surplus of 70,000 ETH at current price levels, further supporting the capital reallocation theory.
Ethereum (ETH), the world’s second-largest cryptocurrency by market capitalization, made a subtle price recovery this Tuesday. This came in the wake of an industry-wide pullback prompted by the Securities and Exchange Commission’s (SEC) legal actions against Binance and Coinbase. A detailed examination of on-chain data exposes a shift in investment trends as capital moves away from beleaguered altcoins.
Recently, there has been a noticeable surge in Ethereum staking activity as investors seem to redirect capital from memecoins and troubled altcoins. With this rising demand for ETH, one could ponder the extent of its price benefit amidst the ongoing industry unrest.
Investors now appear to be turning to the yields offered by ETH staking to alleviate their losses from the plummeting altcoin prices. Data indicates that between June 1 and June 8, Ethereum holders staked an extra 1 million ETH. The “ETH Staked” metric signifies the number of coins currently committed to the Ethereum beacon chain. Generally, an increase in staked tokens reduces the supply available for trading on crypto exchanges, potentially triggering price gains if demand starts to outstrip supply.
Corroborating this bullish perspective, exchange order books reveal an uptick in Ethereum market demand outperforming its supply. The Exchange On-Chain Market Depth chart aggregates total buy/sell orders from various crypto exchanges. At present, buy orders stand at 213,500 ETH, outweighing the 145,190 ETH offered for sale.
When an asset’s demand surpasses the volume of sell orders, it creates a competitive marketplace, prompting buyers to elevate their bid prices for swift order fulfillment. The current ETH supply shortage of 68,310 on exchanges suggests a likely upward movement in Ethereum prices as buyer competition heats up.
Despite the prevalent pessimism in altcoin markets, Ethereum might seize the opportunity to bounce back above $2,000 in the ensuing weeks. However, IntoTheBlock’s In/Out of The Money Around Price (IOMAP) data highlights an initial significant resistance around $1,900.
At this price point, 3.05 million addresses purchased 5.31 million ETH at the highest price of $1,905, which might lead to a pullback. Yet, if Ethereum can overcome this resistance zone, it could approach $2,000 again.
Conversely, the rebound prediction could be disrupted if ETH unexpectedly slips below the critical $1,795 support zone. However, the 3.51 million investors who bought 9.51 million ETH at the minimum of $1,795 will likely attempt to bolster the price. A breach of this support level, albeit unlikely, could see Ethereum retracing towards $1,650.