Leading to x on April 26, an analyst twitter.com/LeonWaidmann/status/1783376676044648835″ target=”_blank” rel=”noopener nofollow”>grades that there is a high probability that ethereum will skyrocket in the coming sessions due to declining sell-side liquidity on major centralized exchanges like Binance and Coinbase.
On the sell side, big potential move for eth
Declining sell-side liquidity, as seen in order books across CEXs, means few sellers are willing to liquidate. With few sellers on the market, a small increase in demand could, in theory, cause prices to skyrocket.
Still, market makers could fill this imbalance by considering how the market works. At the same time, prices are not guaranteed to rise even if they remain as they are.
Unlike new meme currencies, for example, ethereum is extremely liquid; It is the second largest coin by market capitalization, behind only bitcoin. That means billions will be needed to push prices above the immediate resistance levels of $3,300 and $3,700, as clearly shown on the daily chart.
ethereum has been under pressure for most of April following a drop from its all-time high of $4,090. Looking at the development on the daily chart, the coin is down 23% from its all-time highs, encountering strong rejection from the mid-BB, or 20-day moving average.
Analysts expect buyers to take control and reverse mid-April losses if a general break above $3,300 is characterized by expanding volume. Otherwise, eth risks falling below $2,800, aligning with the April 12-13 selloff.
Spot ethereum ETF launches in Hong Kong, adoption drives optimism
However, traders are generally optimistic and anticipate a price rebound in the coming months. Several factors could drive eth prices higher. A major catalyst is the highly anticipated launch of ethereum exchange-traded funds (ETFs) in Hong Kong. Much like the impact of bitcoin spot ETFs on btc prices, this product for eth can prop up the currency, allowing traditional investors to gain exposure to the world's second most valuable currency.
In the United States, the biggest obstacle preventing the Securities and Exchange Commission (SEC) from approving a similar product is the uncertainty over the classification of eth. On April 25, ConsenSys sued the regulator, pressuring it to classify the currency as a commodity.
Beyond the launch of this product at the end of the month, ethereum's main strengths remain. The continued adoption of ethereum and Layer 2 scaling solutions continues. As more protocols choose to deploy on the smart contract platform, there is optimism about the long-term viability and growth of ethereum.
Featured image from Canva, TradingView chart
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