Ethereum’s price performance over the past 6 weeks indicates a growing conflict among traders regarding market trends in March. This skepticism has led to Ethereum price stabilizing in a narrow channel between $1,600 and $1,700 since February 15 (Dec 25).
The possibility of a 25% correction of Ethereum price in March
According to Coielegraph, the reason traders are indecisive is the implemeation of the Shanghai Ethereum update in March.
As this update enables the withdrawal of staked tokens on the Ethereum Proof-of-Stake Network smart coract, some analysts predict that this eve will cause a short-term price drop (due to an increase in supply).
According to Etrascan data, since the launch of the China Beacon Proof of Stake network on December 1, 2020, more than 17.4 million Ethereums worth approximately $28.35 billion have been staked.
Moreover, it seems difficult for Ethereum to break through the curre resistance range. As you can see in the chart below, Ethereum has made several attempts to turn the $1,650-$1,700 resistance zone io support since August 2022.
Ierestingly, each failed breakout attempt has resulted in a sharp price correction to a strong support level, Ethereum’s multi-moh uptrend line.
As a result, based on the historical trend, Ethereum’s next correction is likely to lower the price to near the $1,250 level, which is 25% lower than the curre level. Conversely, with the price crossing the $1,650-$1,700 range, Ethereum could move towards the $1,925-$2,000 range as its next bullish target.
Such data: Ethereum price correction will be limited
From the perspective of such an analysis, there is a small possibility for the price of Ethereum to fall by 25%.
Especially, since September 2022, we have seen a significa decrease in the supply of Ethereum in exchanges from about 30% to 11%. On paper, this could alleviate some of the sudden selling pressure as capital is directed out of the market (exchanges).
Seime pois out that the trend (supply) of digital currencies has been rapidly leaving exchanges and storage in non-custodial wallets since September. This analytics platform adds:
The speed of this process has increased after the fall of the FTX exchange. Despite the fact that the supply of Bitcoin and Ethereum on exchanges has reached its lowest level in about 5 years, future price declines will be limited.
In addition, the analysis company of Anchen Cryptocoin has also reached a similar conclusion regarding the possible decrease in the price of Ethereum, mainly due to the implemeation of the Shanghai Update.
The company says that currely, 60% of the staked Ethereum supply, around 10.3 million tokens, is in the red. Meanwhile, LidoDao, the largest Ethereum staking platform, holds 30% of all Ethereum staking with an average loss of $1,000 (per token).
Usually, selling pressure occurs when traders or investors have made a lot of profit, which is not the case with Ethereum stocks at this time. Furthermore, the most profitable Ethereum stakes were deposited io the network less than a year ago and have not seen significa price increases before that.
