Ethereum Price Analysis: Volatility Persists as Bitcoin Rally Halts
The cryptocurrency market in March has been marked by increased volatility, with the Bitcoin price rally stalling at $64,000. This sideways action has also affected other major coins like Ethereum, XRP, SOL, and BNB, with each struggling to break through their respective resistance levels. However, the inflow of capital into spot BTC ETFs, which played a significant role in the recent uptrend, remains strong.
Recent data from Lookonchain on March 1st reveals that Grayscale (GBTC) reduced its Bitcoin holdings by 3,606 BTC ($223 million). In contrast, eight spot BTC ETFs collectively added 10,999 BTC ($680 million) to their portfolios. Notably, Blackrock alone accounted for 9,730 BTC ($601 million) of this increase, indicating a significant shift among institutional investors towards Bitcoin investment.
Investors Display Confidence in Ethereum by Withdrawing $906 Million from Exchanges
Examining the daily time frame chart for Ethereum reveals a surge in buying pressure since the second week of February. The coinโs price has risen by 51% from a local support level of $2,268 to its current trading price of $3,426.
This bullish trend can be attributed to various factors such as increased inflow into BTC ETFs, progress in Ethereumโs hardfork upgrade Dencun, and positive sentiment surrounding Spot ETH ETFs.
Additionally, IntoTheBlockโs analysis shows that Ethereum (ETH) has experienced consistent withdrawal from exchanges. Over the past week alone, $906 million worth of ETH left exchanges. This marks the eighth consecutive week of net outflows for the second-largest cryptocurrency by market capitalization.
This sustained movement of ETH away from exchanges could indicate a growing trend of long-term holding among investors or a decrease in selling pressure.
Possible Correction for Ethereum Price?
Currently trading at $3,425, the Ethereum price has encountered supply pressure at $3,524, as evidenced by the daily candle with long rejection wicks. If this supply pressure persists, the coinโs price may retest the breached trendline of the expanding channel pattern, resulting in a 5% drop.
However, if the support level holds, ETH buyers will have a solid foundation to continue the current recovery towards $3,924 and potentially even $4,235.
Technical Indicators
- Exponential Moving Average (EMA): The fast-moving 20-day EMA can act as an initial defense line for buyers.
- Relative Strength Index (RSI): The daily RSI (80%) slope is rising in the overbought region. This indicates that the ETH price may experience a minor pullback before resuming its bullish momentum.
The cryptocurrency market remains volatile as Bitcoinโs rally pauses and major altcoins like Ethereum face resistance. However, the influx of institutional investment through spot BTC ETFs suggests continued confidence in Bitcoinโs long-term prospects.
Ethereumโs price surge and consistent withdrawal of ETH from exchanges also demonstrate investor confidence in the second-largest cryptocurrency. As Ethereum continues to navigate these market dynamics, it remains to be seen whether a correction or further rally is on the horizon.
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