The price of Ethereum peaked on February 29 at $3,500, bringing the monthly gains to an impressive 56%. Market supply trends indicate that another surge towards $4,000 may follow in March 2024.
Ethereum, the mega-cap Layer-1 coin that includes Bitcoin, dominated the price charts for February 2024.BTC), Solana (SOLCardanoADA).
The analysis of data chains examines the key data trends. ETH Position yourself for a dominant bullish performance in March.
Ethereum Supply Declines; $2.1B Transferred to Long-Term Storage
You can also find out more about the following: successful Dencun upgrade Testnet implementation and the growing momentum surrounding ETH ETF filings Ethereum’s 56% increase in price between February 2024 and February 2025 was a result of major bullish catalysts.
ETH could continue to rise in value for the remainder Q1 of 2024, based on data from the blockchain.
The Ethereum community has shifted its focus to a long-term investment strategy and passive income, rather than a short-term profit.
CryptoQuant’s Exchange Reserves track the real-time movements of investors’ Ethereum balances on crypto trading platforms and exchanges.
In the chart below, you can see that at the end of January 2014, there were 14,433,873 ETH in exchange reserves. The figure is now down by 663 322, ETH and has reached 13,770 551, ETH as of the date of writing.
At the current price of $3,500 this means that investors have moved $2.3 billion in ETH worth from trading wallets to long-term storage contracts and staking.
This massive decrease in reserves means there is less ETH available to trade on the spot markets.
Ethereum provides a wide variety of yields that can encourage investors to forgo opportunities to earn profits sooner. Whale investors will be able to access passive income rewards of 4% from the beacon chain. Retail investors have many high-yielding DeFi protocol options.
Recent increases in demand for liquidity staking derivativesDencun upgrade In the weeks to come, ETH will probably continue to decrease in supply.
If macro-market sentiment remains positive, the induced scarcity of the market could push ETH towards the $4,000 mark by March 2024.
In February, 1.84 million new users joined the Ethereum network.
Ethereum’s dominating price performance in the month of February has clearly boosted its market position. Ethereum’s bullish forecast for March 2024 is further confirmed by the fact that the network welcomed many new participants in the last month.
Santiment’s number of holders metric tracks how many funded wallets are currently registered on each cryptocurrency network. The chart below shows the ETH network has welcomed 1,84 million new wallets, as total holders grew from 115.5 million to 115.5 millions between Feb.1 and Feb.29.
Increased wallet funding indicates a global retail adoption that is growing and new capital entering the ecosystem. In February, Bitcoin’s network saw a drop of 70,000 wallet addresses, which further emphasized Ethereum’s dominance in the market.
The market forces that are in place for Ethereum to reach $4,000 by March 2024, are the growing demand of the 1,84 million newly funded ETH addresses and the decline of $2.3 billion in the exchange supply.
In the short term, however, the bulls will need to first climb the major sell-wall around $3,550.
This is also confirmed by IntoTheBlock’s global data on money in/out, which groups existing ETH holders according to their purchase prices.
This shows that 1,2 million addresses, who bought 356,130 ETH in the price range maximum of $3.543, could face a sell-off as prices approached their breakeven point.
If ETH can overcome this roadblock, then the rally may gain momentum and reach $4,000 as expected.
Ethereum bears may regain control if ETH falls below the $3,000 level. This is unlikely at this time, given the sell-wall that’s looming around the $3,100 level.
2.1 million investors who bought 1.1 millions ETH for an average of $3,090 each could make frantic buys to avoid net loss positions.
“This article is not financial advice.”
“Always do your own research before making any type of investment.”
Source: crypto.news