Ethereum Price Analysis: Bulls faces slight resistance around the $650 as CME introduces ETH futures
Daily Ethereum ETH Price Forecast
- IntoTheBlock’s IOMAP shows healthy support at the 20-day SMA.
- Ethereum has consistently drawn at least 150,000 new addresses over the last three months.
Ethereum has jumped up past the $600-level and neared the $650 psychological level. However, it seems like the buyers and sellers have started using the $650-level to both enter the market and leave the market. Let’s look at what’s going on behind the scenes.
Bears and bulls play tug of war
Ethereum jumped up from the 20-day SMA and is trending near the $650 level. As of now, the bulls and bears are wrestling for control of the market. However, the MACD shows increasing bullish momentum, which means that the buyers will eventually regain control.
Image: ETH/USD daily chart
IntoTheBlock’s IOMAP also shows that the resistance at $650 is weak-to-moderate. The buyers should be able to take over this barrier and shoot themselves above $750.
On the downside, the healthiest support lies at the 20-day SMA ($590). Previously at this level, 1.17 million addresses had purchased 9.62 million ETH tokens. This wall should be robust enough to absorb a huge amount of selling pressure.
Image: ETH/USD 4-hour chart
The 4-hour price chart shows another strong resistance at $675. It seems like when the price approached this zone, the relative strength index (RSI) got pushed into the overbought zone. However, following the rejection, the price dropped back under 70.
Up next, we will be checking out the number of new addresses entering Ethereum over the last three days.
As you can see, Ethereum has consistently drawn at least 150,000 new addresses, which is a sign of a healthy network.
Ethereum 2.0 deposit contract now has >$1B
Ethereum 2.0 currently has over $1 billion worth of Ether (ETH) for the first time. The blockchain has witnessed an increase in deposits, as the number of ETH rose from 98,000 last month to the current 1.5 million ETH.
The increase in deposits has continued even after the minimum requirement of 524,000 ETH was met on November 24. Solo stakers and staking service providers have been making the deposits in chunks of 32 ETH.
Kraken, on behalf of its customers, sent around 100,000 ETH. Other exchanges such as Coinbase are all set to launch Ethereum staking too. The participation rate of 35,000 active validators is above 99%, as per a Trustnodes report.
The system working as it should be is increasing the confidence for new stakers who cannot see their deposited ETH for at least two years. However, trading venues might let them exchange their holdings for unstaked ETH, dubbed BETH. As per the Trustnodes report, the staked amount might reach 10 million ETH a lot sooner than anticipated. This translates to a practical reduction of 10% in Ethereum’s total supply.
CME announces ETH futures
The Chicago Mercantile Exchange (CME) Group has recently announced its plans to roll out Ethereum cash-settled futures contracts. Ethereum has been moving upward consistently, with its price recently surpassing $600.
Some are speculating that ETH’s price rally was assisted by the latest surge in Bitcoin’s price, which recently broke to a new all-time high above $20,000. However, there appears to be another catalyst for ETH’s upward trajectory. The CME Group has announced that it will be launching ETH futures catering to its institutional investors in February 2021.
The official website says that that one contract will contain 50 ETH, while an explainer video clarifies that the contracts will be settled in cash. This is similar to how Bitcoin futures on CME work. The company has also made it clear that strong customer demand made them take this path.
The company website states:
As with any new product or service, we made the decision to launch Ether futures based on strong customer demand and a clearly articulated customer need.
Today, ether is the second largest cryptocurrency by both market capitalization and daily volume. Ether futures on a regulated, time-tested exchange can offer a way for investors to hedge risk exposure in the ether cash market – we’re creating a forward curve so investors can better manage price risk.
Key price levels to watch
The $650 psychological level is absolutely key since conquering this should push ETH into the $750 zone.