Ethereum (ETH) price has once again surged above $3,900. This bounce hinted at further growth for the altcoin before the end of the year.
But does this mean that the cryptocurrency can surpass its previous all-time high within this short period? The following on-chain analysis answers this question.
Ethereum Loses Dominance in Two Key Zones
Ethereum is currently trading at around $3,939, which means its price has increased by 67.30% in 2024. One indicator that has played a key role in ETH’s rally over the year is its Open Interest (OI).
OI refers to the sum of all open contracts in the market. When it increases, it means that more liquidity has flowed into contracts related to a cryptocurrency. In the derivatives market, this indicates increased buying pressure, which can lead to higher prices.
On the other hand, a decrease in OI indicates selling pressure. The decline suggests that traders are increasingly closing their positions and withdrawing liquidity from the market.
According to Santiment, Ethereum’s OI surged to $14.50 billion yesterday, December 15. However, at the time of writing, it has fallen to $13.94 billion, indicating that ETH exposure has been reduced. Given the above conditions, this decline suggests that Ethereum’s price is at risk of another decline if OI sustains this position.
Open Interest do Ethereum. Fonte: Santiment
Another indicator that supports this bias is Ethereum exchange inflow. Exchange inflow is the average amount of coins per transaction sent to exchanges. A high value suggests that investors are transferring larger amounts, signaling increased selling pressure, which could potentially drive prices lower.
A low exchange inflow in the metric, however, suggests a decline in selling pressure. According to CryptoQuant, exchange inflow has risen from what it was on December 14, indicating that selling pressure around ETH has increased.
If sustained, this could prevent the cryptocurrency from rallying to $4,500 or reaching a new all-time high before the close of 2024.
ETH flow on exchanges. Source: CryptoQuant
Price prediction
According to the daily chart, the Parabolic Stop-and-Reverse (SAR) indicator has risen above the ETH price. The SAR is a technical indicator that shows whether a cryptocurrency has encountered solid resistance or support.
When the dotted lines are below the price, it indicates significant support that could push the price higher. However, currently, the dotted lines are above the price of Ethereum. Therefore, the cryptocurrency is facing resistance.
As long as ETH trades below the indicator, the price is likely to decline, with possible targets around $3,315. If that is the case, the price of Ethereum may not reach a new all-time high before the end of the year.
Ethereum Chart on TradingView
However, if Open Interest increases and foreign exchange inflows fall to an extremely low point, the prediction may be invalidated.
The article Ethereum (ETH) Above $3,900 — What’s Next? appeared first on BeInCrypto.
