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On November 6, the price of Ether (ETH) jumped to $ 447 on Binance while the price of Bitcoin (BTC) returned to the $ 15,500 level after losing around $ 15,900. Based on Ether’s strong momentum, traders expect a broader rally to emerge in the near term.
There are three potential reasons why Ether could see a big bullish trend in the coming weeks. The catalysts are: an optimistic technical structure over a long time frame, favorable on-chain metrics and the launch of Ethereum 2.0.
ETH is bullish in the higher time frames
In September, a pseudonymous trader and chart artist known as “Crypto Chief” tweeted a weekly Ether chart outlining two possible scenarios.
The bearish scenario showed a rejection of the $ 360 support level followed by a sharp decline. The bullish scenario showed confirmation of $ 360 as a support level and a potential run up to $ 800.
Referring to the support level of $ 360, the trader She said:
“If this holds up, we should see $ 815 in the coming months. Invalidation on the graph. “
Since making this prediction, Ether has successfully defended the $ 360 macro support area over the past two months. It is currently testing the $ 450 resistance level, which has remained a strong resistance area throughout 2020. .
When a major resistance level breaks out, a breakout rally can quickly occur, which is why traders speculate on the Ether price much more than in previous weeks.
The Skew data also shows that the volume of 24-hour futures for Ether has increased significantly since late October. This shows that traders are identifying $ 450 as an important level for ETH and are defending or attempting to overcome it.
Fewer ETH address holders are in profit
According to data from IntoTheBlock, 75% of Ethereum addresses are currently in profit. In comparison, 98% of Bitcoin addresses have a state profit.
Investors are generally more likely to sell when they are sitting on large unrealized profits than when their investments drop significantly. Therefore, substantially fewer addresses in profit for Ether than for Bitcoin is a positive metric that supports the argument that the rally has room for continuation.
ETH 2.0 is another bullish factor
ETH 2.0 is currently slated to launch on December 1, and some analysts speculate this could cause a supply shortage.
With the ETH 2.0 staking system, users can wager 32 ETH and, in return, receive a 15% incentive on their stakes. The staking process means allocating ETH to the addresses of the ETH 2.0 contract. During the staking period, users cannot use or transfer their ETH unless they choose to stop staking.
If the popularity of staking grows, as it can generate a stable return with relatively low risk, it would cause a drastic drop in the current supply of ETH, particularly on exchanges.
Less ETH would be sold and more would accumulate as users move towards staking their holdings. This could create more demand for the upper altcoin and drive the Ether price above the $ 450 level.
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