Ethereum: October Price Analysis

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One of the most significant changes brought about by Ethereum’s transition to a Proof-of-Stake consensus method was tied to the supply dynamics of ETH. This development was marked by The Merge.

Since ETH is no longer mined, there are significantly fewer units of it entering the market every day, by a factor of up to 90%. We can monitor the changes with the aid of ultrasound money data. Since the Merge, a total of 7,525 ETH have been released onto the market as new supply as of this writing. Our simulation of a PoW scenario reveals that if the network had been using its previous consensus mechanism, this amount would have been closer to 340,000 ETH.

Source: Glassnode

After The Merge was finished on September 15, there were 120,520,222 ETH in circulation overall. It increased to 120,534,212 ETH at the beginning of October; this amount alone indicated a sharp decline in the issuance of Ethereum as a result of the withdrawal of proof-of-work miners. The entire supply would have been close to 120,944,347 ETH if the blockchain had not switched to a PoS model.

Since October 8, there has been a decrease in the overall supply as a result of the burn rate exceeding Ethereum issuance. As a result, 49,562 ETH have been burned in the last 30 days at a pace of 1.15 ETH per minute on average. The entire supply of Ethereum appears to have peaked, and it is now just a matter of days before it might go below the level at which it was circulating at the time of The Merge.

Price Analysis Overview

Ether’s upward momentum was unable to continue when Ethereum switched to proof-of-stake (PoS) on September 15, as ETH miners increased sell pressure in the market.
On the daily chart, the price of ETH decreased by approximately 16% from around $1,650 on September 15 to around $1,350 on September 20. Concerns over additional Federal Reserve rate hikes caused the ETH/USD pair to decline along with other prominent cryptocurrencies, such as Bitcoin.

Technical analysis is also quite unbiased in light of the sideways market action now occurring. The momentum indicator shows that after the market crash on September 13, there was a steep decrease, which was followed by a comeback and leveling off that occurred from September 21 to the present. The ETH is trading in a constrained range at the time of writing.The range high is at $1,380 while range low is at $1,240 price level. This shows that the market is indecisive.

Source: Tradingview

Bullish Case: For the trend to shift in favor of the bulls, the ETH/USD must close above the $1,380 range high level. The bears are expected to continue to defend the level. The pair might move up to the $1,550 price level, though, if buyers manage to push the price past the overhead resistance at $1,380. The bulls must overcome this crucial resistance in order to signal a potential trend change.

Bearish Case: If the price falls below $1,237, the range low level of the consolidation phase, and below the present level, the ETH/USDT pair may test the intraday low from October 13 at $1,160. If the bulls are to indicate a probable trend change, they must get beyond this significant obstacle. The current macroeconomic headwinds, which are exerting pressure on risk-on assets globally, provide a $250 risk to ETH’s price. Last but not least, traders and investors need to keep an eye on the movement of Bitcoin (BTC). This is because the 30-day correlation between ETH and BTC was 40%.

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