Ethereum price may be on the cusp of a strong bullish breakout this week despite weak on-chain metrics. ETH token was trading at $2,645 on Wednesday, up by over 91% from the lowest point this year. This article provides an on-chain analysis and what to expect.
Ethereum on-chain analysis
Third-party data is sending mixed signals about Ethereum price as its consolidation continues. Santiment shows that whales have started to capitulate after the recent surge.
These investors now hold 103.48 million ETH coins, down from this month’s high of 103.75 million, meaning that they have sold 270,000 coins currently valued at over $711 million in the past few days.
More data shows that Ethereum’s open interest has started falling after reaching a multi-month high of $11.2 billion on May 26. It has dropped to $10.78 billion today, a sign that demand in the futures market is falling.
Another data shows that Ethereum fees have dropped sharply in the past few days. The average fee has dropped to $0.324, down from this month’s high of $0.97.
Falling fees show that the network is not all that active. On the positive side, this performance may push more investors back to Ethereum’s mainnet from layer-2 networks.
The falling fees has led to a falling burn rate of Ethereum coin. Total fees burned on the network has dropped to less than $3,000 on Wednesday, down from this month’s high of $100,000.
Another notable fee-related data is that the rent that layer-2 networks pay to Ethereum have plunged. Base paid $124k in the last 30 days, a 52% plunge from the previous period. Similarly, Arbitrum One and Optimism Mainnet paid $41k and $14k, respectively.
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Ethereum demand is rising
There are signs that demand for Ethereum coins is rising. SoSoValue data reveals that spot Ethereum ETFs added $38 million inflows on Tuesday, making the seventh consecutive day of inflows. It has had inflows in the last three consecutive weeks, bringing the total inflows to $2.8 billion.
BlackRock’s ETHA ETF leads with $3.6 billion in assets, and is followed by two Grayscale funds with $3 billion and $1.3 billion, respectively.
Demand for Ethereum ETFs is weaker than that of Bitcoin, whose funds have accumulated over $43 billion in assets.
More data shows that the total value locked (TVL) in the Ethereum chain has continued rising. It now holds $134 billion in assets, with Lido, AVE, EigenLayer, and Ether.fi being the biggest players. The amount has risen to 50.3 million in ETH terms, up from 45 million in January.
Total stablecoins on the network have jumped to a record high of $122 billion, with Tether having $62 billion and USD Coin having $36 billion. The other top stablecoins on Ethereum are Ethena USDe, Dai, and Sky Dollar.
Ethereum price prediction
Fundamentals are sending a mixed picture about Ethereum’s network. The daily chart shows that the coin is hovering at the 38.2% Fibonacci Retracement level. It is slowly forming a bullish flag chart pattern, a popular bullish continuation sign in technical analysis.
Ethereum price has moved above the 50-day and 200-day Exponential Moving Averages (EMA). The two averages could form a golden cross pattern in the coming days or weeks if ETH price rises.
The most likely scenario is where the ETH price has a bullish breakout and jumps to the resistance point at $3,000. A move above that level will point to more gains, potentially to the 61.8% retracement at $3,055.
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