On Tuesday, the price of Ethereum (ETH) rebounded slightly following an industry-wide retracement prompted by the SEC’s lawsuit against Binance and Coinbase. However, an in-depth analysis of on-chain data indicates that investors are reallocating their capital away from troubled altcoins.
The latest data shows a significant increase in staking activity on Ethereum this week as investors move away from memecoins and other troubled altcoins. With ETH demand rising across exchanges, how much will Ethereum price benefit from these shifts, despite the ongoing industry turbulence?
A Spike in Staking Activity Could Trigger an ETH Price Rebound
As altcoin prices continue to fall, holders are now turning to ETH staking yield to mitigate their losses. According to the chart below, Ethereum holders staked an additional 1 million ETH between June 1 and June 8.
The ETH Staked metric tracks the number of currently staked coins on the Ethereum beacon chain. Generally, when holders lock up more tokens, it reduces the supply available to be traded on crypto exchanges.
The momentary shortage of tokens on the market could trigger ETH price gains if demand begins to outpace supply.
Investors are Queuing Up to Buy the Dip
In further confirmation of the bullish outlook, exchange order books show that Ethereum market demand is starting to outpace supply. The Exchange On-Chain Market Depth chart aggregates ETH holders’ total buy/sell orders across different crypto exchanges.
Currently, investors have ordered to purchase 213,500 ETH, while sellers have placed just 145,190 Ethereum tokens up for sale.
When the demand for an asset exceeds the volume of sell orders, competition increases, and buyers are inclined to increase their bid price to get their orders filled quickly.
Currently, there is a supply shortage of 68,310 ETH across exchanges. This suggests that the Ethereum price will likely rise further when buyers compete.
ETH Price Prediction: $2,000 on the Horizon
Despite the general gloom in altcoin markets, ETH will likely benefit from its rebound above $2,000 in the coming weeks. However, data from IntoTheBlock’s In/Out of The Money Around Price (IOMAP) suggests that ETH will face its initial major resistance of around $1,900. This is where 3.05 million addresses bought 5.31 million ETH at a maximum price of $1,905, which could cause a pullback.
If ETH can overcome that resistance zone, it could rise toward $2,000 again.
On the other hand, below the critical $1,795 support zone, the bears could invalidate the ETH price rebound prediction. However, the 3.51 million investors that purchased 9.51 million ETH coins at the minimum of $1,795 will try to shore up the price in this scenario.
Although unlikely, if that support level is breached, ETH could retrace further toward $1,650.
Disclaimer
This price analysis article is for information purposes only and should not be considered financial or investment advice according to the Trust Project guidelines. Bitrabo is devoted to providing accurate, unbiased reporting, but market conditions are subject to change without warning. Always conduct your own research and consult with a professional before making any financial decisions.
