As Bitcoin’s price recently declined below the $30.5K mark and tumbled near $30K, it brought a slight bearish domination to altcoins, and Ethereum is no exception. The recent dip raises questions about the upcoming trend of Ethereum’s price, what factors could potentially influence its recovery and whether ETH price could reach the $2K mark. As of now, Ethereum is struggling to regain its footing and build bullish momentum, making it crucial to analyze the reasons behind this lack of buying pressure.
Ethereum Shows Bullish Developments
In May 2023, ETH Staking achieved an unprecedented peak, as reported by Glassnode. Surpassing this milestone, investors persisted in staking more coins the following month, further elevating the benchmark. The chart illustrates the period from June 1 to July 4, during which ETH holders staked an extra 1 million ETH coins. As a result, the total amount of ETH staked now constitutes approximately 30.6% of the overall circulating supply.
A supply squeeze commonly arises when the availability of an asset becomes constrained or restricted. Such circumstances frequently result in substantial price surges due to temporary challenges in acquiring the asset.
As Staking activity intensifies, the supply of tokens accessible for fulfilling market orders diminishes proportionately. If this situation persists, it could potentially give rise to a supply squeeze in the Ethereum ecosystem.
However, Recent findings from Glassnode suggest a slowdown in network activity despite the comparatively lower transaction fees. To delve further into this matter, data indicates that during the Shanghai upgrade event in April, which was followed by a similar rally in ETH markets, gas prices experienced a 78% increase, in contrast to the 28% increment observed so far this week.
What’s Next For ETH Price?
The bears recently attempted to pull Ether’s price way below the 50-day EMA at $1,913, but the presence of a long tail on the candlestick indicates that the bulls are actively purchasing during minor dips.
Currently, the 20-day EMA has shown a downward turn, and the RSI is below the midline at 41 on the 4-hour price chart, indicating that the bears are gaining their power. If the ETH price drops below the immediate support line at $1,890 and heads toward $1,846, it will intensify a rally toward $1,761.
On the bullish side, there is a slight resistance at $2,000, but it is likely to be overcome. As a result, it is expected that the ETH price will experience a rally toward the overhead resistance zone ranging from $2,150 to $2,200. However, it is anticipated that sellers will fiercely protect this zone.
This optimistic perspective will be nullified in the near future if the price reverses from $2,000 and drops below the moving averages. In such a scenario, the price may continue to trade within a range-bound pattern between $1,600 and $2,000 for a while longer.
