When Bitcoin’s price recently fell below $30.5K and tumbled near $30K, it brought a slight bearish dominance to altcoins, and Ethereum is no exception. The recent dip raises questions about the upcoming trend of Ethereum’s price, what factors could potentially influence the recovery, and whether ETH price could reach the $2K mark. As of now, Ethereum is struggling to regain a foothold and build bullish momentum, making it critical to analyze the reasons behind this lack of buying pressure.
Ethereum shows bullish developments
In May 2023, ETH Staking reached an unprecedented peak, as reported by Glassnode. After surpassing this milestone, investors continued to stake more coins the following month, further boosting the benchmark. The chart illustrates the period from June 1 to July 4, when ETH holders wagered an additional 1 million ETH coins. As a result, the total amount of ETH staked now makes up about 30.6% of the total circulating supply.
A supply squeeze usually arises when the availability of an asset becomes restricted or restricted. Such circumstances often lead to significant price increases due to temporary challenges in acquiring the asset.
As Staking activity increases, the supply of tokens accessible to execute market orders decreases proportionally. If this situation continues, it could potentially lead to a supply constraint in the Ethereum ecosystem.
However, recent findings from Glassnode suggest a slowdown in network activity despite relatively lower transaction costs. To dig deeper into this matter, data indicates that during the upgrade event in Shanghai in April, which was followed by a similar rally in the ETH markets, gas prices saw a 78% increase, in contrast to the rise of 28% observed so far this week.
What’s next for the ETH price?
The bears recently attempted to pull the price of Ether well below the 50-day EMA at $1,913, but the presence of a long tail on the candlestick indicates that the bulls are actively buying during minor dips.
Currently, the 20-day EMA is showing a downturn and the RSI is below the centerline at 41 on the 4-hour price chart, indicating that the bears are gaining strength. If ETH price drops below the $1,890 immediate support line and moves towards $1,846, it will intensify a rally towards $1,761.
On the bullish side, there is a slight resistance at USD 2,000, but it is likely to be overcome. As a result, ETH price is expected to experience a rally towards the upper resistance zone ranging from $2,150 to $2,200. However, sellers are expected to fiercely protect this zone.
This optimistic perspective will be negated in the near future if the price reverses from $2,000 and drops below the moving averages. In such a scenario, the price may continue to trade within a range-bound pattern between $1,600 and $2,000 for a while.
