Bittime - The price of Ethereum (ETH) experienced a sharp decline of 20% in the last week. However, while other investors were panicked, futures trading data actually showed a strong bullish outlook.
Price Increase Stops, When is the Time to Buy ETH?
ETH price surged 20% between March 3-13, 2024, reaching a high of around $4,100 before forming a double top pattern. The second price rejection was followed by a 20% correction, retesting the $3,200 support level on March 19. Analysts suspect the initial rise was triggered by excessively leveraged long positions.
ETH's bullish momentum faded after forced liquidations of $375 million worth of ETH futures contracts occurred over the past week. The question is, is this correction enough to stop the price decline and potentially start the bull run again?
Check Today's Crypto Market:
ETH Lags Behind Competitors
The decline in ETH prices is more significant compared to the overall performance of the crypto market. Crypto market capitalization briefly peaked at $2.77 trillion on March 14, but then stabilized at around $2.35 trillion, down 15.5% in five days. ETH's lackluster performance was also triggered by a 12% decline in the price of Bitcoin (BTC) in a week, while Solana (SOL) actually experienced a 21% increase and Binance Coin (BNB) remained relatively stagnant with a 2% decrease.
Interestingly, Solana is facing its own challenges in the form of increasing transaction fees and failed transactions due to the network being overwhelmed by the surge in activity, mainly driven by huge interest in new memecoins. Cointelegraph reported that traders poured about $100 million into the new Solana memecoin in just three days.
Ethereum Network Upgrade and Its Impact
On March 13, the Ethereum network underwent its most significant upgrade in over a year, coinciding with ETH's price peak for the 2024 cycle. The hard fork drastically reduces transaction fees for layer-2 networks such as Arbitrum, Optimism, and Base, thereby increasing scalability Ethereum. In addition, the introduction of data blobs also increases the network's ability to handle data.
The upgrade can be seen as a success, as evidenced by a spike in activity on the layer-2 solution to an all-time high, with an average of 122 transactions per second (TPS) over the past two days, according to L2beat. This figure represents a 31% increase from the previous week and is eight times greater than Ethereum's base layer capacity of 15 TPS.
Despite great anticipation for the Ethereum network upgrade, gas fees on the base layer are still a significant issue. According to BitInfoCharts, the average transaction fee reached around $12 on March 18. This situation highlights the appeal of alternative platforms such as Solana and Avalanche (AVAX) which are seeing price increases amid falling ETH prices.
Futures Contracts: Buy ETH Seeing Bullish Indications Amid Correction
In the midst of the price correction, there is a glimmer of hope from the futures market. The 20% drop in ETH prices since March 13 has caused the funding rate of ETH perpetual contracts to approach zero. This shows the balance of demand between long and short position holders, indicating market equilibrium.
The decline in the funding rate to its lowest level in three weeks at 0.014% per 8 hour period, or the equivalent of 0.3% for seven days, is in sharp contrast to the situation the previous week. At that time, buyers had to face a 1.2% fee to maintain their long positions for the week. This significant shift indicates a decline in buying enthusiasm which was previously very hot.
Professional Trader's View?
To understand whether professional market players have also shifted to a neutral view, we need to analyze monthly futures contracts. Typically, in such markets, futures contracts trade at a 5% to 10% premium over spot exchange, reflecting the cost of holding the investment until settlement of the contract.
ETH futures contracts are currently trading at a 22% premium, an unusually high premium indicating excessive demand for long positions, likely driven by optimism related to upcoming decisions on ETH-based exchange-traded funds (ETFs) . Interestingly, this optimism persisted even after ETH's price correction to $3,200 on March 19, which could be seen as a bullish signal amidst the overall market recalibration.
Buy ETH (Ethereum) Today
Source: Bittime.com
On March 20, 2024, the price of ETH (Ethereum) was at $3,126 per coin, down 7.53% in the last 24 hours.
Also Read How to Buy Crypto:
Even though there is a significant price correction, there are still opportunities for investors who want to buy ETH. Here are some factors to consider:
Technical Analysis
- Relative Strength Index (RSI): ETH's RSI is currently around 38, signaling a saturated area that points to a buying opportunity.
- Moving Averages: ETH has broken below the 50-day Moving Average (MA) and 200-day Moving Average, indicating a short-term bearish trend.
- Ichimoku Cloud: ETH is below the Ichimoku Cloud, indicating selling pressure.
Fundamental Analysis
- Ethereum Upgrade: The Shanghai hard fork scheduled for mid-2024 is predicted to significantly improve the scalability and efficiency of the network.
- ETH Adoption: The use of ETH in various industries, such as DeFi, NFT, and Metaverse, continues to increase.
- Market Sentiment: Overall crypto market sentiment remains bullish in the long term, despite a short-term correction.
Investment Strategy
- Dollar-Cost Averaging (DCA): This strategy allows investors to periodically purchase the same amount of ETH, regardless of price fluctuations.
- Limit Order: This strategy allows investors to buy ETH at a certain predetermined price.
- Diversification: It is important to diversify your portfolio by investing in various crypto assets, including ETH, to minimize risk.
Conclusion
The ETH price correction amidst the overall bullish sentiment of the crypto market presents an opportunity for investors looking to buy ETH at a more affordable price. However, it is important to carry out in-depth analysis and implement the right investment strategy to minimize risks.
Check Crypto Prices Today:
How to Buy Ethereum (ETH) on Bittime
You can buy and sell Ethereum (ETH) in an easy and safe way via Bittime . Bittime is one of the best crypto applications in Indonesia which is officially registered with Bappebti.
Ethereum (ETH) is available on Bittime with the market pair ETH/IDR . To be able to buy ETH/IDR at Bittime, make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application.
Learn the complete guide on how to buy Ethereum (ETH) on Bittime.
Monitor price chart movements for Ethereum (ETH), Ethereum (ETH) , Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.
Also Read:
Buy BTC Now or Wait for a Correction? Dilemma Between Golden Opportunities and Floating Losses
Affordable ETH (Ethereum) Purchase Costs, Mass Adoption Gets Easier After Gas Fee Drop
Shiba Inu (SHIB) Barking Again: Rally Toward $0.00004?
DISCLAIMER: This article is informational in nature and is not an offer or solicitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
Comments
0 comments
Please sign in to leave a comment.