Investor interest in Ethereum continues to grow as the cryptocurrency seeks to break out of its current consolidation phase. On-chain data reveals a strong demand for Ethereum, with exchange reserves experiencing a sharp drop. This has led to speculation that the price of ETH may soon establish $3000 as a solid support level.
Ethereum’s Netflow Drops Amid Strong ETF Inflow
Over the past 24 hours, Ethereum has seen a significant increase in volatility, as evidenced by the liquidation chart. Coinglass data shows that total liquidations for Ethereum have surpassed $49 million, with long positions accounting for $30.8 million and sellers closing their positions contributing $18.2 million.
In a promising sign for Ethereum, spot ETFs have attracted substantial investments this month, with 145,000 ETH (equivalent to over $387 million) flowing in. This surge in ETF inflows, seven times higher than January’s levels, suggests growing interest from both individual and institutional investors, potentially propelling Ethereum towards key resistance levels.
As ETF inflows boost demand for Ethereum, the cryptocurrency’s netflow on exchanges has decreased. According to IntoTheBlock data, Ethereum’s netflow has dropped to a negative $82.4 million, indicating that investors are withdrawing their holdings from exchanges, reducing the likelihood of selling pressure.
Additionally, Ether reserves on centralized exchanges have reached a nearly nine-year low, reinforcing investor optimism about a potential market bottom that could pave the way for a rally towards the $3,000 level. On February 18, ETH reserves across all exchanges dropped to 18.9 million, the lowest since July 2016 when Ether was priced at around $14.
The decreasing supply of Ether on exchanges suggests that investors are moving their ETH to cold storage wallets for long-term holding. This trend is typically viewed as a positive sign, as it indicates less selling pressure and greater price stability.
What’s Next for ETH Price?
Despite encountering strong resistance from sellers, Ethereum’s price has been on the rise, surpassing key resistance levels and now aiming for the $3,000 mark. Currently priced at $2,676, Ethereum has experienced a 3.1% drop in the last 24 hours.
The ETH/USDT trading pair is approaching the critical $3,000 hurdle. If Ethereum can maintain a position above this level, it could favor buyers and potentially drive the price towards January’s peak of $3,500.
Conversely, if the price falls below the EMA20 line on the 1-hour chart, sellers may push it down to around $2,530 to test buyer patience. Failure to hold above this level could lead to a further decline, with a potential retest of the $2,200 mark.
Meanwhile, the Relative Strength Index (RSI) currently sits just below the midpoint at level 44, suggesting a potential price increase in the near future due to sustained buying interest.
In conclusion, Ethereum’s growing investor interest, strong ETF inflows, and decreasing exchange reserves paint a positive picture for the cryptocurrency’s price outlook. As Ethereum continues to navigate key resistance levels, all eyes are on whether it can establish $3,000 as a solid support level in the coming days.