ETH Price Holds at $2,500 as Futures Liquidations Rise
The price of Ether (ETH) has managed to hold on to the $2,500 mark, despite an increase in futures liquidations. According to data from monitoring resource Coinglass, $15.03 million of ETH shorts were liquidated on January 16, compared to $5.3 million in long liquidations. This surge in liquidations coincided with the ETH/USD pair reaching highs of $2,614, breaking through the resistance at $2,500.
Chart: ETH/USD daily chart. Source: TradingView
Moreover, data from Glassnode shows that short liquidations dominated long liquidations on January 16. This signifies the dominance of short positions on the market.
Chart: Ether futures long liquidations dominance chart. Source: Glassnode
10xResearch’s report highlights an increasing share of open interest in Ether since the beginning of the year. The report states that while Bitcoin’s open interest remains flat, Ethereum’s share has increased from 21.8% to 26.5%.
Investors are now expecting Ether to continue to appreciate against Bitcoin. As shown in the chart below, Bitcoin’s dominance indicator has dropped below 50% for a fourth day, indicating that altcoins, particularly Ethereum, can perform better than Bitcoin.
Chart: Bitcoin vs. Ethereum dominance. Source: 10xResearch
Further boosting Ethereum’s prospects, on-chain data provider Santiment reveals that Ethereum’s price dominance against Bitcoin has surged by 22.4% in the past week. This period also witnessed the creation of approximately 89,400 new Ethereum addresses per day. To add to that, an astounding 96,300 wallets were created on January 16 alone.
Moreover, Santiment’s data also shows that ETH’s supply on exchanges is nearing its all-time low of 8.05%. This suggests that there is a shift towards self-custody and staking, reducing the risk of a sell-off and presenting a more favorable scenario compared to a rising supply on exchanges.
These on-chain metrics shed light on Ethereum’s current market strength and its potential to outperform Bitcoin in the short term.
Ethereum Dencun Upgrade Live on Goerli Testnet
The latest upgrade to the Ethereum network, known as “Cancun-Deneb” or “Dencun,” has now gone live on the Goerli testnet. The implementation of EIP-4844 lies at the core of the Dencun deployment, which is expected to significantly lower transaction costs on Ethereum layer 2 solutions like Optimism, Base, Polygon zkEVM, and others. Additionally, the upgrade will limit self-destruct operations and introduce new bridge and staking pool features.
Ethereum’s roadmap for 2024 indicates that the next major milestone in Dencun’s testing schedule is set for January 30, when it will be implemented on the Sepolia testnet. This will be followed by the Holesky testnet on February 7. However, a date for the upgrade’s implementation on the mainnet has not been announced yet.
It is important to note that this article does not provide investment advice or recommendations. Readers are advised to conduct their own research and analysis before making any investment decisions.
Analyst comment
Positive news. The price of Ether (ETH) has held steady at $2,500 despite an increase in futures liquidations. Short positions dominate the market, and Ethereum’s open interest has increased. On-chain data shows increasing Ethereum dominance and a decrease in ETH supply on exchanges. The Ethereum network upgrade, “Dencun,” has gone live on the Goerli testnet, with the potential to lower transaction costs and introduce new features. Ethereum’s market strength and potential to outperform Bitcoin in the short term are highlighted. Investors can expect continued appreciation of Ether.
