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Ethereum is flat at press time, moving within a narrow range of $400 with caps at $2,300 on the lower end and $2,800 on the upper end. Despite investors’ optimism and their expectation of rising prices in the coming sessions, uncertainty is still sweeping the market.
Ethereum finds support at $2,300: Over 52 million ETH purchased
The world’s second most valuable currency is a bearish one, down more than 50% from its July highs and unable to break the local resistance at $3,500. While traders are closely watching how price action moves, one analyst has picked out an interesting development from the market data.
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Citing IntoTheBlock data on October 11, the analyst said He notices More than 52 million ETH were purchased by traders at around the $2,300 level. Considering the amount of coins in traders’ hands at this price, this area is an immediate support zone.
As such, if buyers have the upper hand, driving prices up from this point, this level will anchor the uptrend. If sellers double down, as has been the case in the past few trading months, the likelihood of ETH falling below its lows in Q3 2024 will be high.
For now, sentiment is bearish, as seen in the CoinMarketCap survey. More than 65% of ETH holders and traders expected Prices will face difficulties in the short term.
Therefore, how prices react to local support will shape the formation in the short to medium term. A rally, which takes ETH price above $2,800, will be crucial in driving demand, providing a much-needed tailwind to bullish traders.
USDT, USDC and Stablecoins Declining Market Cap: Is Purchasing Power Dwindling?
Despite the high level of optimism, other relevant market data indicates weakness. Over the past few trading weeks, the market capitalization of stablecoins such as USDT and USDC has declined. As of October 10, analyst Notes It is down $780 million from its recent highs, indicating a potential decline in purchasing power.
Typically, when USDC, USDT and even DAI move to centralized exchanges, more users are keen to buy crypto assets, including ETH and BTC. However, if there is an outflow or its market capitalization dwindles, it could mean more users become cautious and closely monitor events before committing.
Typically, more coins, including stablecoins, tend to find their way onto centralized exchanges when there are concerns about market prospects. Such flows tend to precede a market-wide correction.
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Currently, ETH flows to centralized exchanges have not been selected. However, what happens is that more shareholders stake. By the middle of this week, market data revealed that more than 34 million Ethereum remained locked, earning holders a 3.3% annual return.
Featured image from DALLE, chart from TradingView
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