Ethereum (ETH) has recently surged, reaching a three-month high. This price increase brings it close to the $3,000 mark, but challenges lie ahead.
Long-term holders (LTH) continue to take profits, which may hinder ETH from reaching the $3,000 mark in the near future.
Ethereum investors are preparing for growth
The number of new addresses has reached a four-month high, indicating a growing interest in Ethereum among investors. The increase in new addresses is a positive signal for the adoption of the altcoin, suggesting that more investors are showing interest in Ethereum.
However, many of these new addresses may be driven by FOMO (fear of missing out), making them more susceptible to volatility. These investors, while helping to raise the price of Ethereum, may also sell quickly if the market shifts, posing a risk to sustaining any price increases.
Despite the risks of FOMO-driven behavior, the increase in new addresses is clear evidence that Ethereum is still attracting new participants. The influx of new investors may help boost the price of ETH. The Liveliness indicator continues to rise this week, indicating that long-term holders (LTH) are increasingly liquidating their assets. Liveliness measures how often tokens are moved from wallets, and an increase in this indicator points to selling pressure.
When LTH exit the market, their sales can negatively impact the price of Ethereum. Since these investors typically hold assets during volatility, their decision to sell may indicate a lack of confidence in the short-term outlook for ETH. This trend of selling could prevent Ethereum from surpassing the $3,000 mark, as happened during the ETH consolidation in May.
LTH play a critical role in supporting the price of Ethereum, and their exit may complicate the altcoin's ability to maintain a strong upward trend. If this trend continues, Ethereum may struggle to reach $3,000. The price of ETH needs to find a way.
The price of Ethereum is currently $2,769, having risen by 14.6% this week after breaking out of a month-long consolidation below $2,681. ETH is now facing resistance at $2,814.
The price of the altcoin is approximately 8% below the $3,000 mark, which it reached in February of this year. If LTH sales stop and overall market signals remain bullish, the price of Ethereum may approach $3,000. However, if current LTH sales continue to outweigh bullish signals, Ethereum is likely to return to the support level at $2,681. Losing this support could lead to further declines, potentially sending ETH down to $2,476. If this happens, the bullish thesis will be invalidated, and Ethereum may enter another phase of consolidation.#BinanceSquare #Write2Earn #Binance #crypto #BTCBreaks110K $ETH