Once again, the price of Ethereum (ETH) has risen above $3,900. This rise indicates a possible increase in the price of the altcoin before the end of the year.
But does this mean that the cryptocurrency can surpass its all-time high in such a short period? This on-chain analysis reveals whether that is possible.
Ethereum Loses Bullish Dominance in Two Key Areas
Ethereum is currently trading around $3,939, which means that the altcoin’s price has increased by 67.30% in 2024. One indicator that has played a major role in ETH’s rise during the year is its open interest (OI).
Open interest refers to the total value of all open contracts in a market. When it increases, it means more liquidity has flowed into cryptocurrency-related contracts. In the derivatives market, this indicates increased buying pressure, which can lead to higher prices.
On the other hand, a decrease in open interest indicates selling pressure. The decrease indicates that traders are increasingly closing their positions and withdrawing liquidity from the market.
According to Santiment, Ethereum’s open interest rose to $14.50 billion yesterday, December 15. However, as of this writing, it has fallen to $13.94 billion, indicating that exposure to ETH has decreased. Given the above circumstances, this decline suggests that Ethereum’s price is at risk of falling again if open interest continues in this state.
Another indicator that supports this bias is Ethereum flow to exchanges. Exchange flow is the average number of coins per transaction sent to exchanges. A high value indicates that investors are moving larger amounts, which indicates increased selling pressure, which can lead to lower prices.
However, the decrease in exchange flow in the metric indicates a decrease in selling pressure. According to CryptoQuant, exchange flow is higher than it was on December 14, indicating that selling pressure around ETH has increased.
If this continues, it could hinder the cryptocurrency from rising towards $4,500 or achieving a new all-time high before the 2024 close.
ETH Price Prediction: Not Reaching $4500 Yet
According to the daily chart, the Parabolic Stop and Reversal (SAR) indicator has risen above the price of Ethereum. SAR is a technical indicator that shows whether a cryptocurrency has encountered strong resistance or support.
When the dotted lines are below the price, they indicate a major support that could push the price higher. However, currently, the dotted lines are above the Ethereum price. Therefore, the cryptocurrency is facing resistance.
As long as Ethereum is trading below the indicator, the price is likely to decline, with potential targets around $3,315. If this is the case, the price of Ethereum may not reach a new all-time high before the end of the year.
However, if open interest increases and exchange flow drops to a very low point, the forecast may be invalidated.