Even though Ethereum has not managed to sustain the $1,900 mark for now, indicators suggest a bullish future and a possible leap toward the $2,100 level.
At the time of writing, Ethereum is trading at around $1,877. Recently, it broke the 50-day exponential moving average (EMA) resistance level but got rejected at $1,932. Despite this minor setback, it is essential to view the bigger picture, focusing on supply dynamics and transaction fees, both indicative of the network's vitality and investor sentiment.
💸 Even though #Ethereum has been unable to maintain the $1,900 level for now, the level of supply continues moving away from exchanges. Additionally, average fees are back to levels last seen in March just prior to the $ETH price ascension to $2,100. https://t.co/f17PQZK3NU pic.twitter.com/637TA0cCT4— Santiment (@santimentfeed) June 22, 2023
A key point to note is the diminishing level of the ETH supply on exchanges. This trend often suggests that holders are moving their assets to private wallets, typically indicating a longer-term holding strategy and reducing the potential selling pressure on the market. This off-exchange migration could be a factor in a future price rise, as reduced supply coupled with sustained or increased demand often drives prices higher.
Furthermore, Ethereum's average transaction fees are back to levels last seen in March, prior to the ETH price ascension to $2,100. Lower fees encourage more network activity, making Ethereum a more attractive platform for developers and users alike. This can stimulate demand for ETH, leading to a price increase.
Looking at Ethereum's price action, the $2,100 level is not uncharted territory. Earlier this year, Ethereum had reached this level, propelled by positive sentiment around the network's upgrade to Ethereum 2.0 and the boom in decentralized finance (DeFi) applications.
Moreover, Ethereum's rejection at the $1,932 level, despite a setback, can also be viewed as a healthy correction. It provides an opportunity for the market to gather momentum for the next leg upward.
In summary, although Ethereum has experienced resistance near the $1,900 level, the long-term view remains optimistic. The reduction of the ETH supply on exchanges and the return of lower average transaction fees could pave the way for Ethereum's journey to the $2,100 mark.