Ether’s trip to $3,000 may have been short-lived, but on-chain data and the state of the wider ecosystem suggests that there’s reason to be optimistic about the digital asset.
Ethereum’s native token ether (ETH) hit a near two-year high ahead of $3,000.
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Posted February 21, 2024 at 2:01 am EST.
Ethereum’s native token ether (ETH) hit a near two-year high ahead of $3,000 on Tuesday – the first time it has traded at this level since April 2022.
The second largest digital asset by market cap rallied over 12% in the last week and briefly changed hands at $3,031, but at the time of writing, had failed to gain momentum towards a move higher, suggesting that this resistance level won’t be so easy to breach.
From a psychological perspective, this recent rally could also have some traders on their toes, given the last time ETH rallied to this level in the weeks leading up to April. 3 2022. At the time, ETH rallied from $2,520 over three weeks to a high of $3,580, but its price plummeted 46% over the next 40 days that followed.
In its most recent review of the crypto market, on-chain analytics firm Glassnode noted that while Bitcoin dominance still remains significant, there are early signs of more investor capital rotating into other ecosystems like Ethereum and Solana.
“We note that following the approval of the Bitcoin ETF, ETH has started to outperform BTC, which is a change from the relative underperformance throughout 2023,” said the Glassnode analysts.
It is also likely that major inflows into ETH will only materialize over the coming weeks, as they tend to lag relative to BTC inflows on account of investors looking for confirmation that digital asset markets are growing.
“In the 2021 cycle, the peak influx of new capital into BTC occurred 20 days before the peak influx into ETH,” said Glassnode.
Options market data suggests that a retest of some crucial price levels might come sooner rather than later. Coinalyze data points to more bullish bets on the price of ETH, with showing that 59% of traders were in long positions over a 24-hour time frame.
