ETH Price Outperforms BTC Since Spot ETF Approval: On-Chain Data Suggests Further Gap Widening
Since the approval of the Spot ETF on January 11, Ethereum (ETH) price has outperformed Bitcoin (BTC). This trend is expected to continue as on-chain data suggests that the gap could further widen in the days ahead. Two vital trading indicators highlight how the ETH bulls could further assert dominance.
Ethereum Bulls Assert Dominance: Investors Shift $1 Billion Worth of ETH into Long-Term Storage
As Ethereum price raced up the charts, there was speculation that investors would book profits at the milestone $2,500 territory. However, at the time of writing on January 18, ETH price has closed each of the last 3 trading days above $2,500, suggesting that the bulls are holding out for more gains. Additionally, on-chain data reveals that investors have shifted 133,271 ETH coins from exchange-hosted wallets into long-term storage in the last 7 days. This indicates that investors have confidence in the long-term prospects of Ethereum and are not looking to sell at the current price levels.
ETH Price Consolidates Above $2,500: Bullish Signal for Ethereum’s Short-Term Price Action
A drop in exchange reserves is often seen as bullish for a cryptocurrency’s short-term price action. It indicates that investors are moving their coins from trading wallets into long-term storage, signaling their confidence and intent to hold out for more gains. With the decline in exchange supply over the past week, it’s no surprise that ETH price has consolidated above the $2,500 support level since January 15. Historical trends show that periods of rapid decline in ETH exchange reserves have often been followed by a price uptrend. If this pattern holds true, Ethereum holders can anticipate an upswing towards $2,600 in the days ahead.
ETH Attracts More Demand: Active Buy Orders Outpace Sell Orders, Indicating Bullish Sentiment
As Ethereum exchange supply declined over the past week, the total number of active ETH sell orders has dropped far below market demand. Currently, there are active purchase orders for 357,490 ETH listed across 20 crypto exchanges, while the bears have put sell orders for only 250,750 ETH. This indicates that the market supply for Ethereum has fallen short of demand by 106,740 ETH. When the demand for an asset outpaces supply by such a large margin, it signals a dominant bullish sentiment within the ecosystem.
ETH Price Forecast: $2,700 Could Be the Next Target for Ethereum
Based on the two critical on-chain data points analyzed above, Ethereum price looks set to remain on an upward trajectory towards $2,700 in the short term. However, the bulls must first scale the $44,000 resistance level. If they can do so, the $2,700 area could be the next target. On the downside, if things take a bearish turn, the bulls can rely on the historically significant buy wall at $2,400 for initial support. If holders in that range make efforts to cover their positions, Ethereum price could stage an instant rebound from that territory.
In summary, the prolonged decline in ETH exchange reserves and the excess demand in the spot markets indicate that Ethereum price could continue to outperform Bitcoin in the days ahead. Investors’ confidence in the long-term prospects of Ethereum, as evidenced by their shift towards long-term storage, adds further support to this bullish outlook.
Analyst comment
Overall, this is positive news for the Ethereum market. The on-chain data suggests that the gap between ETH and BTC will continue to widen. Bullish indicators, such as investors shifting ETH into long-term storage and a decline in exchange reserves, support the expectation of further price gains. Active buy orders outnumber sell orders, indicating strong demand for ETH. The short-term price target is $2,700, with initial support at $2,400. Consequently, the market is expected to continue its upward trajectory in the coming days.
