Four Reasons Ether Survived a Dip Below $3,000 and Insights on Future Trends
Ether recently faced a price drop to $3,000, which many analysts interpreted as a buy-the-dip scenario. Examining market indicators suggests a recovery is likely.
Key Insights
- Ether’s profitability metrics have decreased to levels typically indicating local bottoms.
- A notable increase of 83% in Ethereum fees weekly suggests robust onchain demand.
- The availability of ETH on exchanges has hit a nine-year low, establishing solid price support at $3,000.
Ether’s recent sell-off found support at $3,000, as market bulls defended this level aggressively. Currently sitting above $3,300, the outlook for Ether appears to be strengthening due to both onchain and technical data.
Ether Traders Facing Losses
On-chain data reveals that the Spent Output Profit Ratio (SOPR) for Ether has fallen to 0.96, indicating that many investors are selling at a loss. This trend suggests that the current price correction is fueled by panic-driven selling away from ETH.
The SOPR metric assesses the profit or loss status of ETH transactions by comparing their last known value to the current sale price. A measurement beneath 1 potentially signals market capitulation or positioning at a market bottom, creating a favorable buying opportunity.
Revived Demand in Ethereum
Recent on-chain analysis indicates positive market sentiment, with Ethereum commanding approximately 56% of the market’s total value locked (TVL), as per DefiLlama data. Over the previous week, transaction fees for Ethereum surged to $9.23 million—an 83% rise since the last week, highlighting its market dominance compared to competitors like Solana, which only saw a modest fee increase of 9.1%.
Declining ETH Supply on Exchanges
Data from Glassnode illustrates that the ETH held by exchanges has plummeted by 22%, reducing from 17 million ETH on August 24 to a nine-year low of 13.14 million ETH. This trend correlates with a significant decrease in Ether deposits to trading platforms of over 31%.
Strong Support for ETH Pricing
Market data indicates that bulls are attempting to keep Ether prices above a critical support range between $3,000 and $3,150, as outlined by the 100-week and 50-week simple moving averages (SMAs). If prices fail to sustain this zone, further declines could be anticipated, dropping to $2,800 or even the 200-week SMA around $2,500.
Analyst Predictions
Crypto analyst Skew mentions, “You want to see buyers stepping in and pushing for control around the $3.2K-$3.4K area.” Fellow analyst Crypto Patel adds, “Maintaining $3,000 support is crucial, as it could trigger the next bullish wave.”
This content does not provide investment advice. Readers are encouraged to conduct their own thorough research before making any investment decisions.
