Ethereum, the second most popular cryptocurrency in the world based on market capitalization levels, has been navigating a troublesome time over the past year. Following a significant dip in price points in 2022, many investors expected prices to rise in 2023. And while the first couple of months had a promising start, things soon changed under the increasing pressure coming in from lawmakers and regulators. Prices took a severe hit again, and while they didn’t plummet as low as they had during the previous year, investors were nevertheless aware of the stagnating prices.
Now it seems like things are gradually improving, with the Ethereum price regaining some of its previous strength. Most investors are convinced a bull run is imminent, and that now is one of the best times to add to their portfolios, before prices become truly steep. However, there were also those that believed values might experience a sharp drop once more, leaving the market to deal with the aftershocks.
Luckily, this hasn’t come to pass, and many are now convinced that things are definitely on the mend.
Value spike
While crypto prices aren’t yet back to their previous levels, and there’s bound to be some time before they achieve their 2021 levels, progress is underway. On-chain data shows that Ethereum might soon have a rally that takes it past $2,500 and perhaps even as high as $3,000. The current price chart pressure is definitely bullish, especially as staking continues to surge and exchange balances record historically low figures.
Over the last month, data shows that the ETH exchange balance achieved a new low of almost 13%. The reduced supply is a definitive bull signal, standing for fewer tokens ready for selling. At the start of June, when tensions were high within the crypto community due to the surge in withdrawals brought on by the crackdown on several consequential exchanges, the NetFlow volume began to change. The situation has remained more or less the same ever since.
Currently, over 23 million ETH coins are locked in staking contracts, almost 20% of Ethereum’s total supply. Around 30%, including DeFi, are in smart contracts, compared to 25.5% at the beginning of 2023.
Price Analysis
Ethereum recently broke over the 50-day moving average of a little over $1,800, paving the way for a bullish tendency within the market. However, the coin is also facing some resistance around the $1,900 level. Researchers believe this barrier, between $1,900 and $2,000, acts like a psychological barrier, ascertaining resistance levels.
Historical research shows that, during 2022, these were the ascending levels as well. Some believe a price-lowering event might still occur, with values around $1,680. But the on-chain movements seem to favor a surge. While a bearish trend is still somewhat likely, it might be a medium – or even short-term one rather than a more extensive movement with longstanding implications.
Bitcoin bond
Bitcoin remains the most popular cryptocurrency in the world. The fact that it is the first to ever appear and that its concept was borrowed by altcoin creators, leading to the creation of the cryptocurrency environment, has caused BTC to have something of a unique reputation among investors. Even those that aren’t involved in trading know about Bitcoin.
Since it is so important within the digital money ecosystem, it should be evident that price changes within Bitcoin’s blockchain will have a more significant effect on the overall market. Recently, digital gold has noted a price surge of up to 12%, which occurred only during June. This is proof of the coin’s resilience in the face of troubles as the market continues to shift and transform.
If Bitcoin’s price were to drop again, this would undoubtedly leave the altcoins exposed, including Ethereum. Should the buyers show their ability to hold onto the $30k level, ETH is also more likely to enjoy a stronger bullish movement.
The IMF and Wall Street
The correlation between cryptocurrencies and traditional finances and assets remains a subject of much debate. While some believe that the only way forward is for the two to join forces and merge, bringing each other’s strengths into the picture, others are certain that nothing good can come from it. For standard finance, the risk is believed to appear because the digital asset market is still quite volatile and could cause well-established markets to become less secure for investors.
However, crypto traders believe that it is actually the traditional market that might have a negative impact due to its centralization and propensity for external influences on the price. This could mean that investors would lose the very thing that attracted them to digital finances in the first place, the fact that they could decide how to operate their own finances.
Some countries have completely banned all cryptocurrencies, including their mining and trading. In 2021, El Salvador became the first nation in the world to adopt crypto as legal tender, a move that brought significant criticism. Lawmakers saw it as a surefire way to impact the nation’s financial integrity and sustainability, as well as an infringement on consumer protection.
However, many have noticed a more permissive stance towards digital assets over the past year. While financial authorities still believe that cryptocurrencies could become a tool that undermines the world’s already well-established economic systems, most have declared their wish to work towards a shared future. Many now believe that outright bans are not in the general public’s interest, as all they would do is push the market underground, making it potentially hazardous.
The future
The cryptocurrency market is still changing and shifting. While there are many predictions out there on how things could develop, the truth is that they are more often than not far-fetched and based more on wishful thinking and personal opinions than anything else. For this reason, it’s essential to not make any rash decisions and commence considerable transactions purely based on the fact that someone had a hunch.
As always, cryptocurrency investors need to remain vigilant of the market changes and the many ways in which trends shift in the world of cyber finance. It’s the best strategy any can adopt.
