After breaching the $2,585 resistance, Ethereum (ETH) prices maxed out at $2,699 on Sunday. However, the currency has pulled back considerably from then onwards and plummeted by more than 3% in the last 24 hours. It may seem that Ether has reached the end of its brief bullish run, but there are indications that traders could place higher bets on the token in the days leading to the London hard fork upgrade.
According to some experts and key indicators, Ether could be poised for a break beyond the $3,000 mark -- making the current retracement a deliberate attempt at reducing the price before the update.
On Sunday, data crunching firm CryptoQuant shared a few significant forces that were driving ETH prices upwards. The factors cited by the company were mostly concerned with Ether reserves across all spot exchanges and withdrawals from trading venues. They also took into account the number of tokens being deposited into ETH 2.0 smart contracts.
As per the data, exchanges witnessed a decline in Ethereum’s reserves across the board, highlighting that investors weren’t willing to exchange their Ether stash for other assets. Also, ETH withdrawals from these exchanges surged at the same time, which means that traders were holding on to the asset before the highly anticipated London hard fork.
The number of Ethereum holders who had staked 32 ETH to become validators on Ethereum 2.0 had also increased after the recent market correction. This activity is viewed as a bullish sign since it removes some Ether from the circulating supply and creates a scarcity in the face of potentially rising demand.
Greg Waisman, the co-founder, and chief operating officer of crypto infrastructure firm Mercuryo, believes that Ethereum could see a return to its previous high of $4,360 owing to its "positive fundamentals."
Seasoned commodities trader Peter Brandt has pointed to similarities between Tesla and Ethereum’s price charts in a recent tweet.
Ethereum has posted 14% gains in the past three days as speculations have heated around the much-awaited update scheduled for August 5.
Meanwhile, Tesla is also in the middle of a three-day impressive streak, where it has added 10% profits to its value. The automobile maker’s stock is currently trading above $700, a level not reached in the last three months. Tesla’s latest resurgence is fuelled by the positive second-quarter earnings report released last week.