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Ethereum is stable at press time, trading in a tight $400 range with caps at $2,300 at the lower end and $2,800 as the upper limit. Even though investors are optimistic, expecting prices to rise in the coming sessions, uncertainty continues to overwhelm the market.
Ethereum Finds Support at $2,300: Over 52 Million ETH Bought
The world’s second most valuable coin is bearish, losing more than 50% from July highs and unable to break local resistance at $3,500. As traders closely monitor price action, one analyst has picked out an interesting development from market data.
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Citing IntoTheBlock data from October 11, the analyst observed that over 52 million ETH was acquired by traders at around $2,300. Considering the amount of coins in the hands of traders at this price, this area constitutes the immediate support.
As such, if buyers have the upper hand and drive prices higher from this point, this level will anchor the uptrend. If sellers double down on their stakes, as has been the case over the past few months of trading, the likelihood of ETH falling below Q3 2024 lows will be high.
Currently, sentiment is bearish, as shown by the CoinMarketCap survey. More than 65% of ETH holders and traders expect prices to struggle in the near term.
Therefore, how prices react to local support will shape the formation in the short to medium term. An increase, taking ETH above $2,800, will be crucial to boost demand, providing much-needed tailwinds for bullish traders.
USDT, USDC and Stablecoin Market Cap Decline: Is Purchasing Power Decreasing?
While optimism is high, other related market data points to weakness. Over the past few trading weeks, the market capitalization of stablecoins like USDT and USDC has declined. As of October 10, the analyst Remarks it was down $780 million from recent highs, suggesting a possible decline in purchasing power.
Usually, whenever USDC, USDT, and even DAI move to centralized exchanges, more and more users want to purchase crypto assets including ETH and BTC. However, if there is an outflow or its market capitalization declines, it may mean that more users are cautious and closely monitoring events before committing.
Typically, more coins, including stablecoins, tend to make their way to centralized exchanges when there is concern about the market outlook. Such flows tend to precede a market-wide correction.
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For now, ETH flows to centralized exchanges have not been captured. However, what is happening is that more holders have been betting. Midway through this week, market data revealed that over 34 million ETH remained locked, earning holders an APY of 3.3%.
Featured image of DALLE, chart by TradingView
