Bitcoin‘s (BTC) price has largely entered a consolidation phase following the approval of a spot ETF, while the altcoin king Ethereum (ETH) has made strong upward moves, closing the gap with the largest cryptocurrency. According to data provided by Santiment, Ethereum’s price dominance has increased significantly against Bitcoin, and many on-chain data points are giving positive signals for ETH.
Extremely Positive On-Chain Data for Ethereum
According to on-chain data provider Santiment, Ethereum’s price dominance over Bitcoin has increased significantly, recording a 22.4% increase just last week. During this period, an average of 89.4 thousand new Ethereum wallet addresses were created daily, demonstrating the network’s growing popularity. Notably, just yesterday, 96.3 thousand wallet addresses were created.
In addition to this increase in on-chain activity, Santiment’s data also reveals a significant trend of Ethereum’s supply on cryptocurrency exchanges approaching an all-time low of 8.05%. This trend towards self-custody and staking presents a more positive scenario compared to concerns over an increased supply on exchanges, indicating a reduced risk of a short-term sell-off. All these on-chain data points shed light on Ethereum’s current market strength and its potential impact on future price movements.
Critical Thresholds for ETH’s Price
Ethereum’s ETH price tested the important $2,500 level again on January 16th after a slight pullback. Particularly, this level had previously served as a significant resistance but is now acting as support for the altcoin king. The price action suggests that Ethereum is trying to enter a consolidation phase.
However, the $2,700 level stands out as a critical threshold representing the upper boundary of the short-term trading range. Analysts consider this level very important, and a breakthrough above it could lay the groundwork for a potential rally, with investors susceptible to FOMO likely joining the rally. According to analysts, if Ethereum’s price crosses beyond $2,700, it could rise up to $3,400.
In a negative scenario, if Ethereum falls below this level, it could move downwards towards the 20-Day Exponential Moving Average (EMA), which corresponds to the $2,300 level. Investors need to closely monitor these critical levels to detect potential changes in Ethereum’s short-term price trajectory.
