Ethereum witnessed a significant surge to $3,663 on March 26, marking a 20% increase from its monthly low recorded on March 19. This upswing is attributed to investors’ growing optimism in anticipation of the Bitcoin halving event. Despite nearing a dip below $3,000 after the post-DenCun Upgrade sell-off, Ethereum’s market sentiment has turned positive, with a notable recovery of 20% on the weekly chart.
On-chain data indicates that investors have adopted a more cautious trading approach, transferring 200,000 ETH into long-term storage as the 30-day countdown to the Bitcoin halving commenced on March 19. This shift in behavior is reflected in the decreasing exchange reserves, suggesting a reluctance among traders to sell in the short term.
The correlation between the reduction in exchange reserves and the proximity to the Bitcoin halving suggests that this event is a significant factor influencing Ethereum investors’ sentiment. The decline in exchange reserves, equivalent to over $740 million worth of ETH, has contributed to a positive impact on the cryptocurrency’s price.
With the decline in market supply and steady demand, Ethereum’s price has surged by 20% since March 19. This trend suggests a potential acceleration in Ethereum’s price recovery phase in the coming days.
Looking ahead, Ethereum’s price is forecasted to face resistance at $3,750, with a potential breakout towards $4,000 in anticipation of the Bitcoin halving. The majority of investors are currently in profitable positions, indicating a reluctance to sell, which could further support Ethereum’s upward trajectory. However, in the event of a market downturn, the $3,500 level is expected to serve as a psychological support for bullish activity.