Ethereum and Bitcoin have shown a strong correlation over an extended period, bringing hopes that Bitcoin’s recent surge above the $50,000 milestone might set the stage for Ethereum to head toward $3,000. The Ethereum derivatives market has witnessed an increase in activity, with traders taking leveraged bullish positions. Moreover, a number of on-chain metrics have shifted to a bullish position, indicating the potential for a significant Ethereum rally in the coming hours.
Investors Begin Their ETH Accumulation
Ethereum’s value slipped below $2,600 as Bitcoin’s price stalled around $50K, triggered by unexpectedly high CPI data. The US Bureau of Labor Statistics reported a drop in the annual US inflation rate to 3.1% in January from 3.4% in December, still above the anticipated 2.9%.
Although the market initially responded poorly to unfavorable news, it has since recovered, with Bitcoin aiming to surpass $52,000 and Ethereum holding steady above $2,700. This turnaround has led to a substantial number of liquidations in the last twelve hours, exceeding $130 million, of which $117 million were from selling positions.
As Ethereum’s price surges past $2,700, there’s a significant increase in investors buying Ethereum, accumulating it in expectation of further gains. IntoTheBlock’s data shows that the Netflow metric for Ethereum has been decreasing and has lately dropped to a negative figure of -69.95K ETH.
This trend suggests that the amount of Ethereum being moved off exchanges for holding is surpassing the amount being deposited, reflecting rising investor confidence. Such a shift points to the possibility of additional increases in Ethereum’s price.
Moreover, the competition to launch a spot Ethereum ETF is intensifying. Franklin Templeton has recently applied for a spot Ethereum exchange-traded fund (ETF), as per a document submitted to the SEC. These developments boost the confidence among holders to accumulate more ETH, triggering further price surges.
What’s Next For ETH Price?
Bears attempted to halt Ether’s recovery around the immediate Fib level at $2,700, but the bulls defended strongly. ETH price is now surging exponentially and touched a high near $2,773. As of writing, ETH price trades at $2,748, surging over 5.1% from yesterday’s rate.
Recently, the ETH price faced a resistance near $2,773 as sellers plunged the altcoin below immediate Fib level. The upward trend of the 20-day Exponential Moving Average (EMA) at $2,619 and the Relative Strength Index (RSI) in the overbought territory signal that a correction is on the horizon. There is a fear of a correction from $2,700; however, holding above this level could send the ETH price towards $3,000.
The crucial support level to monitor on the downside is the breakout level of $2,400. Should ETH price drop below this level, selling pressure might intensify, potentially sending the price down to the support at $2,150, where buyers are likely to put up a strong defense.
