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.
Also Read: Top 4 AI-Based Altcoins Poised To Surge 20% As Bitcoin Hits $51,000!
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.
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