Ethereum Price Analysis: ETH Hovers Around $3,800 Following Correction

Daily Ethereum ETH Price Forecast

Last Updated July 23rd 2021
3 Min Read
  • Ethereum price dropped by almost over the last two days. 
  • The MACD shows sustained bullish market momentum.
  • Since the beginning of March 2021 to May 11, the Ethereum price had jumped by almost 200% as it went from $1,400 to $4,175. Earlier this Wednesday, the smart contract leader reached an all-time high of $4,362.35. Since then, ETH has been on a downtrend.

    ~$500 Corrections Sees Ethereum Price Drop Below $4,000

    Looking at the Ethereum price chart, we can see that ETH dropped from $4,175 to $3,700 over the last two days, losing ~$500 over the last two days. Since then, ETH has corrected itself to $3,845. The MACD shows sustained bullish momentum, indicating positive market sentiment. The relative strength index (RSI) is in the overbought zone. However, today’s bearish price action has dipped it towards the neutral zone.

    Image: ETH/USD daily

    Ethereum ETH Daily Chart

    On the upside, Ethereum price has an extremely strong resistance barrier at $3900 wherein almost 30,000 addresses had purchased ~7 million ETH tokens. This wall is strong enough to absorb a lot of selling pressure.

    Image: IntoTheBlocks

    Ethereum ETH Volume Chart

    FalconX’s Head: Institutions Will Come For Ethereum Over Bitcoin

    Head of Institutional Coverage at crypto trading platform FalconX Aya Kantorovich recently said that Ethereum is the next destination for institutional investors once they are done with Bitcoin. According to Business Insider, Kantorovich noted that the Ethereum network already has an established underlying infrastructure to support the entry of institutions.

    Kantorovich added that the extended upgrade of the Ethereum network would likely spark more interest from institutions. She said:

    They’ve just started understanding: what are the payment rails, the on and off-ramps, the custody solutions, how do we make sure everything is compliant with our trading partners, who are the trading partners. And they just finished that with bitcoin. Now doing that with ethereum is going to be really easy because the infrastructure’s already set up. 

    Kantorovich said that despite Ethereum hitting a record price, the rally is not comparable to BTC, which has seen an upsurge in institutional investors. An entry of institutions into the Ethereum ecosystem will likely push the price to increase further. 

    After Ethereum’s record price of $4,358 on May 5, 2021, Kantorovich said that the asset is also witnessing a surge in capital inflow. She emphasized that trading on the Chicago Mercantile Exchange (CME) is seeing investments of up to $10,000 on options contracts for Ether.

    Notably, the surge in ETH price is a result of the DeFi sector growth since most projects run on Ethereum. The sector’s total value locked (TVL) stands at around $50 billion, and Kantrovich projected it will potentially hit $100 million by the end of 2021. 

    Kantorovich also said that with the DeFi sector taking on the roles of the traditional finance system, institutions like banks should be concerned. However, she stated that banks are already making inroads to incorporate different aspects of the DeFi sector to avoid becoming obsolete.

    Ethereum Sentiment Is Still High

    Ethereum Sentiment

    Number of Addresses Holding 0.1+ ETH Coins just reached an ATH of 5,053,747 according to Glassnode, which shows us that more new investors are entering the market.

    Plus, CryptoQuant data tells us that Ethereum supply in exchanges has been going down.

    Ethereum Exchanges' Supply

    "Unlike Bitcoin, $ETH holdings have been decreasing in both derivative/spot exchanges, intensifying the sell-side liquidity crunch. Ethereum ecosystem and its usability are making $ETH leave centralized exchanges."

    Ethereum Price Is Expected To Reach These Levels

    The buyers will have a hard time breaking past the $3,900 resistance barrier. However, if they do, a foray back to all-time high levels is in the cards.