The price of Ethereum (ETH) experienced a significant surge, reaching as high as $3,350 on April 28. This marked a 17% increase over the past 10 days, and on-chain indicators suggest a key catalyst behind this recent uptick.
During the market downturn on April 19, when Ethereum price hit a low of $2,868, there were concerns of a potential crash similar to the post-Bitcoin Halving event in 2024, which could push ETH to new lows. However, instead of a large-scale sell-off, ETH whale holders and users of Liquidity Staking Derivatives (LSD) turned to yield staking contracts to generate passive income and navigate through the market downturn.
As previously mentioned in a report from The Crypto Basic, a surge of $620 million in Ethereum 2.0 staking appears to have helped alleviate the selling pressure in ETH markets over the past week.
In the past 10 days, Ethereum price has outperformed Bitcoin by a significant margin. While ETH has recovered by 17% between April 19 and April 29, BTC price has dropped by 5% during the same period.
Looking beyond the price action, on-chain data trends observed in the past three days indicate that Ethereum is likely to continue its winning streak over BTC in the coming week.
The IntoTheBlock Exchange Netflow metric tracks the daily difference between deposits and withdrawals of a specific cryptocurrency across recognized crypto exchanges. A negative trend in Exchange Netflow suggests that investors are withdrawing coins for long-term storage or staking contracts, thereby reducing the available spot market supply.
As seen in the snapshot above, Ethereum has recorded negative flows for three consecutive trading days starting from April 26. During this period, investors have shifted a total of 5,410 ETH from exchanges to long-term storage and staking contracts.
As of April 29, ETH price is trading around $3,180, indicating that Ethereum holders have reduced the current market supply by approximately $17 million.
Based on the $17 million decline in ETH market supply, Ethereum price is expected to outperform Bitcoin for a second consecutive week as bulls aim to reclaim the $3,500 milestone.
However, historical accumulation trends suggest that Ethereum price must surpass the $3,266 territory, where 2.07 million addresses hold 4.93 million ETH, in order to validate this bullish price forecast.
If Ethereum bulls can successfully break above the $3,270 level, further upward movement towards $3,500 could be anticipated. On the other hand, if ETH price experiences another significant downturn, it could potentially drop as low as $2,980 before finding strong support.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. The views expressed in this article are solely those of the author and do not reflect the opinion of The Crypto Basic. Readers are advised to conduct their own research before making any investment decisions. The Crypto Basic is not liable for any financial losses incurred.
