Ethereum is at a critical juncture after failing to break above the $2,500 mark yesterday, leaving investors uncertain about its next move. As the broader crypto market anticipates a rally, Ethereum traders closely monitor signs of strength within the network. Despite recent price struggles, there are promising signals from the blockchain.

Key data from IntoTheBlock suggests a growing demand for ETH staking, reflecting long-term confidence in the network’s future. This surge in staking activity indicates that investors are still optimistic about Ethereum’s potential, particularly with upcoming developments like staking rewards and network upgrades.

However, the recent price action has raised concerns, as many had expected ETH to climb higher by now, especially following a period of positive sentiment across the market.

With the crypto market poised for a possible rally, Ethereum’s next moves could set the tone for broader market performance. Investors are now watching closely to see if ETH can regain momentum or if it will continue to struggle at current resistance levels. The coming days will be pivotal in determining whether ETH can break through and initiate a sustained upward trend.

Ethereum Staking Signals Long-Term Confidence 

Ethereum is trading below a key resistance level as the broader crypto market prepares for a potential rally in the coming weeks. The market sentiment has been increasingly bullish, with investors expecting Ethereum to play a crucial role in the next upward move.

According to key data from IntoTheBlock, 28.9% of all ETH is now staked, a significant increase from the 23.8% recorded in January. This surge in staking activity is a clear indicator of growing long-term confidence in the Ethereum network.

Interestingly, over 15.3% of Ethereum has been staked for over three years, showing that many investors are committed to holding their ETH for the long haul. This strong staking activity reinforces the narrative that ETH is viewed as a valuable asset in the evolving crypto landscape and that many investors are betting on its long-term success.

The recent increase in staking and Ethereum’s upcoming network upgrades suggest that ETH is well-positioned for a potential surge. As market fundamentals continue to improve, the entire crypto market seems poised for a rally, and ETH could lead the charge. If ETH breaks past its resistance levels, the momentum could trigger a significant upward movement in the weeks ahead.

ETH Testing Supply Levels

Ethereum is trading at $2,434 after failing to break above the 4-hour 200 moving average (MA) at $2,458. This technical level has acted as a significant resistance point, and bulls need to reclaim it to maintain upward momentum.

A key target for Ethereum’s price action is surpassing the 4-hour 200 MA and breaking above the 200 exponential moving average (EMA) at $2,511. Doing so would strengthen the bullish case and open the door for a potential rally.

However, if ETH continues to struggle and fails to break past these critical resistance levels, a deeper retracement could be on the horizon. In such a scenario, the next significant demand zone lies around $2,150, which could provide a solid foundation for a potential rebound.

With Ethereum investors closely watching these levels, the price action in the coming days will be crucial in determining whether ETH can regain its bullish momentum or face further downside risks. Bulls must reclaim key technical indicators or risk losing control of the trend, leading to a retest of lower support zones.

Featured image from Dall-E, chart from TradingView

Ethereum bulls might struggle for momentum at press time, but other onchain data points to interesting developments. While ETH is trading above $2,400 but capped by determined sellers, IntoTheBlock data shows that nearly 30% of all circulating ETH has been staked.

Over 34.4 Million ETH Staked In 9 Months

As of October 8, IntoTheBlock analysts note that 28.9% of all ETH has been staked. At this level, more holders are committing to tie their stash. The figure is up, rising from 23.8% recorded in January 2024. More than 15.3% of ETH has been staked out of this amount for over three years.

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Ethereum switched the proof-of-work consensus algorithm in September 2022, officially transitioning to a proof-of-stake network like Cardano. The migration permitted the platform to do away with energy-intensive miners who were replaced by validators.

Parallel data from Ethereum shows that over 1 million network validators have cumulatively locked in more than 34.4 million ETH. Each validator earns an APR of 3.3%, a non-compounding annual yield that falls depending on the amount locked.

All network validators must lock at least 32 ETH and operate a node that ensures the network operates every day of the week without downtime. There are penalties for validators who collude to, for example, confirm invalid transactions or attempt to take over the chain in a majority attack.

That Ethereum is attracting more validators despite prices contracting from Q1 2024 highs of around $4,100 to as low as $2,100 in early August is an endorsement of the platform’s long-term prospects.

Presently, Ethereum remains the second largest platform after Bitcoin and the only other crypto project after Bitcoin to get the node for a spot ETF from the United States SEC. Even so, ETH remains under pressure below $2,800, dashing hope.

EIP 7781 Seeks To Boost Ethereum Scalability

Beyond this, Ethereum developers continue to build, looking to enhance user experience and improve scalability. After the Dencun upgrade in March 2024, a new Ethereum Improvement Proposal (EIP) 7781 was recently floated.

The proposer seeks to further boost Ethereum’s processing speeds by reducing slot times and increasing the blob capacity. Specifically, the goal is to eventually reduce the slot time from around 12 seconds to 8 seconds, which could increase the transaction throughput by over 30%.

If this proposal goes through, decentralized exchanges, including Curve or Uniswap, would benefit. Of note is that users, due to higher throughput, will see the cost of mainnet transactions shrink. Although the proposal is welcomed, solo stakers must acquire new gear and strengthen their internet connections.

Feature image from Canva, chart from TradingView

Ethereum (ETH) currently trades approximately 11% below its local highs of around $2,730. Investors are optimistic about a potential price surge in the coming days, driven by encouraging on-chain data.

Key metrics from Glassnode indicate a decline in ETH inflows into exchanges, suggesting that investors are holding onto their assets rather than selling. This trend typically points to increased accumulation and could foreshadow a bullish breakout.

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As the broader crypto market evolves, Ethereum investors remain vigilant, anticipating a bullish reclaim that could propel prices higher. The decrease in exchange inflows could signify that traders are positioning themselves for a potential upward movement, as they seem more inclined to retain their holdings during this crucial phase.

Should Ethereum successfully break above critical resistance levels, it could reignite bullish momentum and attract further investment. The next few days will be pivotal for ETH, as traders closely monitor price action and on-chain metrics for signs of a resurgence. With the right conditions, Ethereum may set its sights on new highs, reinforcing the overall positive sentiment in the market.

Ethereum Exchanges’ Net Position Change Decreases

Ethereum (ETH) is currently at a crucial price level following a 15% dip from its local highs. The broader crypto industry is brimming with anticipation for a massive rally after the Federal Reserve’s decision to cut interest rates a couple of weeks ago. However, despite the optimistic outlook, prices have struggled to climb higher, leaving many investors on edge.

Fortunately, on-chain data from Glassnode suggests a reduction in selling pressure, which could improve market sentiment and pave the way for a potential ETH rebound. One key metric to consider is the Ethereum Exchanges’ Net Position Change indicator, which has been downward since mid-September. This indicator tracks the flow of ETH into and out of exchanges, and its recent decline signifies that inflows have dropped significantly.

Lower inflows typically indicate reduced selling pressure, as fewer investors are moving their assets onto exchanges to sell. This shift in momentum reflects a positive change in market sentiment, suggesting that investors may be less inclined to liquidate their positions at current price levels. 

As selling activity decreases, Ethereum could gain some much-needed breathing room to recover from its recent decline.

Moreover, increased confidence among investors might lead to upward price movement in the coming days. Ethereum may be positioned for a resurgence if this trend continues, potentially setting the stage for a bullish breakout as market dynamics shift in its favor. As traders remain vigilant, all eyes will be on ETH to see if it can capitalize on this improved sentiment and regain upward momentum.

ETH Testing Crucial Supply Levels 

Ethereum (ETH) is trading at $2,448 after facing rejection at the 4-hour 200 exponential moving average (EMA) at $2,516. The price also struggled to maintain momentum above the 4-hour 200 moving average (MA) at $2,458, indicating a critical moment for ETH. If Ethereum fails to reclaim both of these key levels in the coming days, it may be at serious risk of dropping towards the $2,200 area, potentially triggering a deeper correction.

Conversely, if ETH manages to break above and hold these crucial indicators, it could signal a bullish trend reversal, opening the door for a surge toward the $2,700 resistance area. The outcome in the next few days will be vital for determining Ethereum’s trajectory.

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Traders and investors will closely monitor these levels, as the ability to reclaim them could provide the momentum needed for ETH to regain strength and attempt to test higher price levels. The current price action reflects the uncertainty in the market, making it imperative for ETH to assert itself decisively to inspire confidence and drive a rally.

Featured image from Dall-E, chart from TradingView