The recent attention to the relationship between Ethereum’s netflow data and its price movement has highlighted potential trends with Ethereum. CryptoQuant, a front-runner in the crypto data analytics space, noted an interesting pattern that seems to repeat itself in a regular manner.
Their analysis shows that each time the netflow data from Ether falls into the negative zone, the price registers a massive spike. The relationship has also attracted attention, even from old market players and crypto enthusiasts, providing a new dimension to the dynamics of the market.
Going further with the data, a clear trend is established while analyzing the netflow with the 14-day Exponential Moving Average (EMA). According to analysts, mild but visible selling pressure is exhibited with every departure of netflow into the positive zone, as implied by yellow dots on the charts. It is, therefore, an indication that caution may be adopted by some market participants when netflow turns positive.
This is coupled with new developments coming up from within the ecosystem. According to a renowned crypto expert who is popularly known as Crypto Rover, in March, there will be a big upgrade for Ethereum. Dubbed EIP-4844, the Ethereum Improvement Proposal intends to improve the project’s scalability in a bid to solve a long-standing problem in the community. The announcement of a Spot Ethereum ETF scheduled to hit the shelf in May 2024 gathered hype as enthusiasts like Muhammad Azhar turned bullish not only towards Ethereum but also toward altcoins at large.
Ethereum Price Prediction
When it comes to price predictions, Ethereum community member and investor Ryan Berckmans sees Ethereum going to the moon, with price targets ranging from $12,000 to a jaw-dropping $27,000 per coin over the next 18 to 30 months. What is perhaps the most positive aspect of Berckmans’s outlook is the fact that, after the upgrade to proof-of-stake as a consensus mechanism took place in September 2022 following the Merge upgrade, selling pressure for the miners was effectively eliminated.
Analysis by Berckmans marks a major shift in Ethereum dynamics of that moment: its first bull cycle post the shift to proof-of-stake. Ethereum should see less selling pressure than it has over the past few cycles, in the sense that miners do not have to sell massive amounts of coins in order to maintain operations.
Berckmans estimates that aggregate proof-of-work sell pressure would drop by 80%, an indication of significant improvement in the resiliency of Ethereum and how it could look at sustainable growth. However, with the bullish sentiments ruling the roost and promising indicators waiting on the horizon, the journey looks pretty stimulating, with opportunities abounding for those who are willing to ride the wave.
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