3 reasons ETH can hit $ 3,000 in the short term despite the risk of overvaluation

ETH has fallen after recovering its two-month highs in the earlier session, suggesting that current upward momentum is about to finish.

Specifically, the ETH / USD pair peaked at USD 2,699 for the first time since June 7 on Sunday. This excessive additionally drives the Relative Strength Index (RSI), a momentum indicator, above 70 – considered by analysts as overbought.

It seems that merchants with short-term risk attitudes had been promoting ETH on high to safe momentary income, which resulted in a slight downward revision.

ETH Will rise to $ 3,257 on a breakout setup descending wedge | Source: TradingView

On Monday, ETH price jumped 1.51% to $ 2,600 to offset the risk of the sell-off on Sunday.

The upside means that merchants can nonetheless wager larger on ETH, particularly in the days main as much as the London onerous fork improve. The end result of this tough fork is {that a} new underlying fee-burning mechanism introduces deflationary traits into the venture’s economic system for the first time.

Greg Waisman, co-founder and COO of the Mercuryo Payments Network, famous that the ETH price may simply exceed $ 3,000 after the onerous fork as it will deliver a “more flexible and cheaper fee structure” to the Ethereum community.

“The elevated hype surrounding the upcoming London onerous fork doesn’t mirror present price developments. […] ETH is presently in retracement; It claims that sellers are intentionally reducing costs to get well from the improve. “

According to IntoTheBlock:

“ETH has had a 12-day successful streak, the longest of all time. The IOMAP indicator reveals that ETH is underneath robust help because it faces the final 2 main ranges of resistance in the chain on its option to hit $ 3,000 once more. Between $ 2,598 and $ 2,753, 1.19 million addresses purchased 2.03 million ETH. “

#Ether has had a 12-day successful streak, the longest ever

This is what the IOMAP indicator reveals $ ETH sits on robust help because it hits the final 2 key ranges of on-chain resistance on its option to $ 3,000

Between $ 2,598 and $ 2,753, 1.19 million addresses purchased 2.03 million ETH pic.twitter.com/KAP3y0V94i

– IntoTheBlock (@intotheblock) August 2, 2021

triangle ingredient Price enhance

At least three on-chain indicators that observe the movement of ETH in and out of addresses point out an expanded bullish setup.

penalties KryptoQuant, the three indicators embody monitoring ETH reserves throughout all exchanges and outflows from trading platforms, in addition to the quantity of ETH paid into Ethereum 2.0 good contracts.

The information reveals that whole ETH reserves are reducing on the exchanges, which reveals that fewer and fewer merchants have an interest in trading ETH for different property. Meanwhile, ETH outflows from these exchanges skyrocketed, illustrating the intent of merchants to carry ETH earlier than, throughout, and after the London onerous fork.

(*3*)

Reservations ETH and Net movement of Cryptocurrency exchanges | Source: CryptoQuant

The third on-chain indicator displays elevated ETH deposits in good contracts.

In specific, customers can deploy 32 ETH in Ethereum 2.0 good contracts to turn into validators of the proof-of-stake blockchain. You can then get rewards for sending transactions to the new Ethereum block or evaluate the work of different validators to ensure the chain is working securely.

The quantity of 32 ETH transmitters exceeds 4,000 | Source: CryptoQuant

Analysts suppose this occasion is bullish as it’s going to take provide to ETH out of circulation earlier than demand is prone to enhance.

Waismann explains:

“The rising Ethereum 2.0 deposits present nice confidence in the future potential of the Ethereum blockchain. This will increase the shortage of ETH, which can have a optimistic impact on the price of the coin. With such optimistic fundamentals, a long-term return to the earlier all-time excessive of 4,360 US {dollars} could be a not too distant price goal for ETH. “

Minh Anh

According to Cointelegraph

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