On November 6, the price of Ether (ETH) on Binance rose to $ 447 as the price of Bitcoin (BTC) fell back to $ 15,500 after a loss of steam from around $ 15,900. Due to Ether’s strong momentum, traders expect a wider rally in the near future.
There are three possible reasons Ether could see a big uptrend in the coming weeks. The catalysts are: an optimistic technical structure with a high time frame, cheap on-chain metrics and the introduction of Ethereum 2.0.
ETH is optimistic about the higher periods
In September, a pseudonymous trader and chartist named “Crypto Capo” tweeted a weekly Ether chart describing two possible scenarios.
The bearish scenario showed a rejection of the USD 360 support level followed by a steep decline. The bullish scenario showed a confirmation of USD 360 as the support level and a potential rise to USD 800.
Regarding the USD 360 support level, the trader said:
“If this level continues, we should see $ 815 in the next few months. Invalidation in the diagram. “
Since that prediction, Ether has successfully defended the $ 360 macro support area for the past two months. It is currently testing the $ 450 resistance level which has remained a strong resistance area through 2020.
When a large level of resistance breaks, a rally can happen quickly and therefore traders are speculating much more on the price of Ether than they have in the past few weeks.
Data from Skew also shows that 24-hour futures volume for Ether has increased significantly since late October. This shows that traders are setting $ 450 as an important level for ETH and either defending it or trying to enforce it.
Fewer ETH address holders are profitable
According to IntoTheBlock, 75% of Ethereum addresses are currently profitable. In comparison, 98% of Bitcoin addresses generate a government profit.
Investors are generally more likely to sell when they are sitting on large unrealized gains than when their investments decline significantly. In this respect, a significantly lower number of addresses that are profitable for Ether compared to Bitcoin is a positive metric that supports the thesis that the rally offers room for continuation.
ETH 2.0 is another bullish factor
The start of ETH 2.0 is currently scheduled for December 1, and some analysts speculate that this could lead to a supply shortage.
As part of the ETH 2.0 staking system, users can use 32 ETH and in return receive an incentive of 15% on their holdings. When setting out, the ETH is assigned to the contract addresses of ETH 2.0. During the stakeout period, users will only be able to use or transfer their ETH if they finish staking.
If the popularity of the stake increases, since it can generate stable returns with relatively little risk, the circulating supply of ETH would decrease sharply, especially on the stock exchanges.
Less ETH would be sold and more accumulated as users stake their holdings. This could lead to greater demand for the top altcoin and cause the ether price to be above the $ 450 level.