Ether (ETH) price dropped to $ 1,660 early yesterday, followed by a 9% recovery in 10 hours. Movement triggering $ 280 million in liquidations of futures contracts, resulting from long-term transactions. excessive leverage showed.
Although the initial concern about the launch of CME’s ETH futures on February 8 seems to have subsided. maintenance of excessive transaction fees It may have weakened investors’ confidence. However, the foundations behind Ethereum still remain solid, suggesting that the ETH price must break away from the eventual declines.
Although the measurements are interpreted positively, not every user can afford a $ 12 transaction fee. A simple token swap on decentralized exchanges costs hundreds of dollars in gas fees and leaves small traders no choice but to leave the network.
Many supporters, including Skale and Optimistic Network, try to overcome this problem. splitting and second layer solutions testing. Eth2 is expected to use fragmentation to split the blockchain into several chunks and increase the number of transactions the network can process simultaneously.
Locked total value (TVL) remains in an uptrend
The extraordinary growth of locked total value in decentralized finance projects cannot be ignored. Adjusted metering provides more reliable data as it tries to clear the readings from ETH price increases.
The 34% increase experienced in the last 30 days falls in line with ETH’s 38% gain in February. Independent of transaction fees, it seems that the value created by automated market maker pools and betting mechanisms still exists.
More data are needed to better understand whether the recent slump reflects a potential local peak and the ensuing downtrend. Besides price action and technical analysis, investors also need to measure in-chain metrics such as network usage. The perfect place to start this is analyze transactions and transfer value looks like.
Coin Metrics data shows 14-day average transactions and transfers that rose over $ 9 billion in daily transactions, up 32% from the previous month. This significant increase in transaction and transfer value points to power and The price of Ether is sustainable at current levels is showing.
Exchange withdrawals indicate long-term holding
Although there is no consensus among analysts about the short-term price effect of withdrawals, the effect is either neutral or bullish. The large continuous entries, which are the opposite movements, show the willingness of the owners to sell. single fall scenario seen as.
From January 1 to February 15, around 600,000 ETH were withdrawn from exchanges. Regardless of whether the whales are transferred to cold wallets or putting Ether into the DeFi ecosystem, these coins appear to be less likely to be sold in the short term.
This move, which took place as Ethereum hit its all-time high of $ 1,870, demonstrates the trust of the indicator holders.
As a result, based on both on-chain measurements and a trading perspective, Ethereum can reach $ 2,000 and the downs are aggressively bought encouraging signals has.