Key Takeaways:
- Ethereum’s addresses in profit reached a new All Time High (ATH)
- Meanwhile, ETH prices struggle to hold above $3.6k
NEW DELHI (CoinChapter.com) — Ethereum, the largest cryptocurrency after Bitcoin, saw its number of addresses in profit (7-day moving average) reach a new record high of over 61.35 million, according to data provided by on-chain data provider Glassnode.
In detail, addresses in profit is an on-chain metric that measures the balances of tokens transferred into a wallet at an average price lower than the current price. As such, the value of these assets has gone up, creating a profit on paper.
In other words, it refers to the profit earned when traders buy the dip.
Ethereum began its bull run on Sept 29, going from the day’s low of $2,769 to reach $3,838 on Oct 6. After that, however, prices pulled back, and ETH is currently struggling to break above $3.6k. Ethereum had a choppy September as it dropped 13% for the month, behind only a 16% slide in June.
Despite the losses, Ether is still up by 827.22% this year, which is probably the reason behind the ATH of full addresses in profit. Moreover, ETH’s number of active addresses(7-day M.A.) also reached a 1-month high of 33,705.899, indicating the demand for Ethereum is back following its recent bull run.
Yet, the volatility in Sept highlights a rough patch in the Ethereum ecosystem. Ethereum’s network speed and transaction costs continue to be a problem. Though the ‘London Upgrade‘ in August aimed to make transaction fees less volatile, it has had a limited effect.
Also Read: Ethereum eyes “break and explode” moment towards $4.5K as ETH jumps 20% QTD.
Meanwhile, Ethereum rivals are taking advantage of the challenges that plague the second-largest crypto by market cap. Ethereum has also long suffered from random glitches, like when the Ethereum chain split into two in August this year after someone attacked the software connected to the blockchain.
Ethereum Fundamentals
Though Ethereum has had its setbacks, the blockchain is not without its fundamentals. The NFT collection Bored Ape Yacht Club recently announced the launch of its Ethereum-based crypto-token in early 2022. Furthermore, the upcoming Altair upgrade is scheduled to activate on the Ethereum mainnet come Oct 27.
Ethereum’s blog states the upgrade represents a ‘warm-up upgrade‘ for the Beacon chain clients and developers. It will also help users prepare for the upcoming Merge when Ethereum transcends from a Proof-of-work to a Proof-of-stake consensus mechanism.
Meanwhile, Frank Holmes, CEO of U.S. Global Investors, is extremely bullish for Ethereum, dubbing it the next cryptocurrency to explode. Mr. Holmes compared the price action of gold and silver- when gold goes up, silver follows- to what happens with Bitcoin and Ethereum.
Ethereum is to Bitcoin (…) is like silver is to gold. Bitcoin makes the big charge, then all of a sudden Ethereum explodes to the upside. That’s the sweet spot for us.
Frank Holmes, CEO, and CIO of U.S. Global Investors in an interview
Mr. Holmes, the executive chairman of HIVE blockchain, explained his bullish outlook on Ethereum using his silver analogy. Like silver has multiple uses in energy, medicine, etc., Ethereum, as a smart contracts platform, is used for DeFi, NFTs, etc. “Ethereum has many more uses than Bitcoin does,” he concluded.
Price Charts
ETH prices reached the $3.5k level before moving horizontally, unable to break and consolidate above the $3.6k level. As a result, Ethereum fell 4.44% on Sunday, ending the previous week down 0.1%. However, Ether bounced back on Oct 11, gaining 8.26% between the day’s low($3,372) to high($3,651) levels.
Recommended: Ethereum analysts weigh behind the $13K ETH projection in Q4 as the crypto market recovers.
For now, ETH has a strong support confluence at $3,352, formed by its 50-day Moving Average and 26-day Exponential MA lines. In the unlikely event of ETH breaching below the support, bulls would try to arrest the fall near $3,147, a price level that previously acted as support between Aug 20 to Sept 20.
Further support for ETH is below the $3k level, at $2,982. However, in the absence of an extreme sell-off pressure, it is unlikely ETH would test support below $3k.
On the other side, resistance for ETH is at $3,689. Barring an extended crypto rally, the resistance would cap any upside movement by bulls. However, if Ether breaks through, it could test resistance at $3,841 before any pullback occurs.
ETH is bullish across all time horizons, as it trades above its short (50-Day) and long-term (200-Day) moving averages.
More bullish hints come from the trend-based momentum oscillator MACD. The indicator, which highlights bullish or bearish momentum as a measure of its histogram bars, continues to give bullish signals for Ether.
In detail, the histogram plots the difference between the MACD line (difference of 12-day and 26-day EMA) and its signal line (9-day EMA of MACD). Positive histogram bars denote bullish momentum.
The relative strength index, which measures the magnitude of price change to determine momentum, is neutral with a value of 58.78.
At the time of writing, ETH was trading at $3,596, up 5.26% on the day.
