Ethereum’s price is holding steady at $3,800 despite a decrease in investor enthusiasm leading up to the release of the US non-farm jobs data. On-chain data analysis reveals a rare bullish signal that could potentially trigger the next rally.
The upcoming release of the monthly non-farm jobs data by the US Bureau of Labor Statistics on May 31 is a significant macroeconomic indicator that affects how regulators and investors perceive changes in inflation and overall economic activity. If there is a further decline in non-farm jobs, it could push the Federal Reserve towards cutting interest rates, and vice versa.
In anticipation of the report, strategic crypto investors have reduced their trading activity, causing the Ethereum markets to enter a consolidation phase over the past 24 hours. This has halted the week-long uptrend following the approval of the ETH ETF.
Between May 21 and May 29, the price of Ethereum surged by 30%, reaching a monthly peak of $3,974. However, between May 29 and May 31, the price retraced by 7% and hit a weekly low of $3,698. This suggests that the post-ETF price rally for ETH may have entered a slowdown as crypto investors take more cautious positions ahead of the upcoming US macroeconomic data.
Despite this slowdown, institutional investors on the Ethereum network are still engaging in large volumes of transactions behind the scenes. The average transaction size on Ethereum has increased significantly since the approval of the ETF, reaching 2.46 ETH as of May 31, reflecting a 240% increase within the last two weeks. This surge in average transaction size is a positive signal, indicating improved sentiment and bullish conviction among investors. It also signifies a significant growth in market liquidity, which may attract new entrants.
Looking ahead, if the US non-farm jobs data elicits a positive market reaction, the surge in transactions could pave the way for Ethereum’s price to break above $4,500 in June 2024. However, there may be a major resistance at $4,200 during the next phase of the rally, as historical buy-in trends suggest that ETH holders may opt to take profits early.
On the downside, if Ethereum fails to defend the $3,700 support level, a decline towards $3,560 could be possible.
It is important to note that this article is for informational purposes only and should not be considered financial advice. Readers are advised to conduct thorough research before making any investment decisions. The views expressed in this article are solely the author’s and do not reflect those of The Crypto Basic. The Crypto Basic is not responsible for any financial losses incurred.