Reassuring statistics are shared for the price of Ether (ETH), the local currency of the Ethereum network. Many experts are positive about the future of ETH price.
ETH fell as low as $ 1,042.31 from January 20 to January 22, then hit an all-time high of $ 1,475. As this article is being prepared, there are data that the biggest altcoin traded around $ 1,306 is likely to rise again in the coming days.
Ethereum Price Index: How many TL (ETH TL) for Ether?
As reported by Cointelegraph, the increase in assets locked in the decentralized financial sector and record transaction volumes are supporting the rise of Ether.
4-hour candlestick chart for ETH / USDT pair. Source: TradingView
It would be a good way to look at on-chain data and the situation in the derivatives markets to see if the strong rise in the Ethereum network will continue.
The amount withdrawn from the exchanges shows that the whales are saving
Withdrawals from exchanges are increasing. Many traders withdraw their money from exchanges to stake, yield farming, or move it to a cold wallet.
Withdrawing cryptocurrencies from exchanges usually indicates a long-term investment. Regular entry of crypto money to the stock markets indicates the desire to sell in the short term.
The amount of ETH held in exchange wallets. Source: Cryptoquant.com
As shown in the graph above, on January 23, the amount of Ether in central exchanges fell to the lowest levels since November 2018. This data shows that investors are saving.
It is also a very positive development for the Ethereum network that the amount locked in the DeFi sector has reached an all-time high of $ 26 billion.
Futures contracts overbought
As is known, the rising level in the market can be understood more or less by measuring the expense difference between futures and spot markets.
March 2021 ETH futures premium. Source: NYDIG Digital Assets Data
The chart above shows that on January 19, the futures premium peaked at 6.5 percent, reaching an annual rate of 38 percent. Traders will need higher price increases before maturity to profit from it. Because this level is thought to be overbought.
Overbought levels in derivatives markets are a moderate warning. Traders can briefly exceed normal leverage rates during the rally and then purchase Ether to adjust their risk.
One way or another, the market adjusted itself while the Ether price fell, and the futures premium is now at the healthy 4.5 percent.
Spot market volume remains strong
Generally, low trading volumes in the markets indicate a lack of confidence. Therefore, significant price increases should be accompanied by strong trading volume.
ETH trading volumes on spot exchanges. Source: Coinalyze.net
Last week, Ether’s daily trading volume averaged $ 6.1 billion. While keeping away from its all-time high of $ 12.3 billion on January 11, it’s still 240 percent higher than December. Therefore, it can be interpreted as a positive indicator supporting the price of $ 1,475, the recent high.
Considering the on-chain data indicating that the Ether whales have been accumulating and the healthy futures contract premiums, it can be said that the market structure is currently reliable.
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