Key Points
Ethereum’s Price Movement
After experiencing both upward and downward fluctuations for several weeks, Ethereum (ETH) crossed the $3,000 price mark. This has led to speculation about the possibility of ETH entering a double-digit price range.
Ethereum broke the $3,000 price barrier on February 20th, following a three-day consecutive uptrend. The daily timeframe chart displayed a 3.35% increase, with the price closing at approximately $2,880 on February 18th. This was followed by a 2.22% rise on February 19th, with the price closing around $2,944.
On February 20th, a 2.38% gain pushed the price to around $3,014, peaking above $3,030. This marked the first time since April 2022 that ETH traded at such levels, reminiscent of the bullish trend observed in 2022 before the market downturn.
At the time of writing, Ethereum’s value had decreased by about 2.7%, pulling it below the $3,000 threshold to trade around $2,930. This recent price decline has corresponded with a decrease in the Relative Strength Index (RSI), which initially surpassed 80 during the price surge, but is currently around 73.
Despite the setback, this suggests that Ethereum is still in a bullish trend, albeit in an oversold zone.
Impact on Liquidation Volume
Ethereum’s price volatility in its attempt to surpass the $3,000 range resulted in a significant surge in liquidation volume on February 20th. Analysis of the liquidation chart on Coinglass showed that each of the positions (long and short) experienced a total liquidation volume of over $20 million.
Specifically, long positions saw a liquidation volume of $20.56 million, while short positions faced a higher liquidation volume of $32.77 million. The combined liquidation on February 20th was over $53 million, marking the first occurrence of such high volume in weeks.
The Ethereum volume chart on Santiment showed that despite the price rise on February 20th, there was no significant movement in volume. By the end of the day, the volume was around 20.3 billion, which was lower than the volume observed on the preceding day when the price was lower. However, at the time of writing, the volume had increased and was nearing $21 billion.
While this might suggest seller dominance, an analysis of the ETH Netflow volume presented different signals. A review of the exchange Netflow volume on CryptoQuant showed that by the end of February 20th, the flow was positive, with almost 770 ETH entering exchanges. However, at the time of writing, the flow had turned negative, indicating that about 25,000 ETH have already exited exchanges.
There is a growing narrative surrounding Ethereum’s potential ascent into double-digit price territories. This narrative is fueled in part by recent ETF proposals from major institutions such as Blackrock. The approval of these proposals could lead to an influx of additional capital, similar to the trend observed in Bitcoin. However, similar to Bitcoin, the impact may take time.
Analysis using the Fibonacci retracement provides insight into potential price levels based on Ethereum’s current high and low trends. The chart indicates that the Fibonacci tool foresees a price range capped at $4,700 with a 200% increase. This suggests that the journey towards a double-digit range may commence once Ethereum enters the $4,700-$5,000 price range.
