Over the past week, the price of Ethereum (ETH) has maintained a steady range between $1,750 and $1,850. However, a closer look at on-chain data suggests that significant developments are on the horizon, potentially propelling ETH to $2,500 in November.
Ethereum Cedes Ground to Bitcoin Amid Crypto Market Rally
During the recent crypto market rally, Ethereum faced stiff competition from Bitcoin (BTC). As of last week, Bitcoin surged to a new peak for 2023, reaching $35,300, while Ethereum struggled to keep up. When considering their performance since September 30, Bitcoin has recorded a remarkable 30% increase, whereas Ethereum has seen more modest gains of just 8%.
Nonetheless, on-chain analysis paints a different picture. It indicates that large institutional investors may be betting on Ethereum’s fortunes shifting in its favor come November.
Intriguingly, data from IntoTheBlock reveals that Ethereum saw a significant surge in Large Transactions, with 5,700 such transactions recorded on October 24. Notably, this trend has continued, with daily ETH Large Transactions consistently exceeding 1,500.
Large Transactions refer to those exceeding $100,000 in nominal value. The increasing number of these transactions signals a strong bullish sentiment and suggests that deep-pocketed corporate investors are actively participating in Ethereum’s markets. Their involvement since the mid-October rally started suggests that if they continue to provide liquidity, Ethereum could be one of the primary beneficiaries of the upcoming upswing.
Whales Hold Sway for Over Two Weeks
The Coinbase Premium Index, another crucial on-chain indicator, is currently shedding light on the bullish sentiment of Ethereum’s whales. The chart from CryptoQuant reveals that Ethereum’s Coinbase Premium Index has remained positive since October 14.
The Coinbase Premium Index measures the percentage difference between quoted prices on Coinbase and Binance spot markets. Strategic investors consider this index important because Binance spot trading is largely driven by retail traders, whereas Coinbase Pro attracts US-based corporate entities and high-net-worth investors seeking a more regulated trading environment. Positive values of the Coinbase Premium Index indicate significant buying pressure among whale investors on Coinbase Pro.
Historical data shows that the last two instances when Ethereum’s Coinbase Premium Index consistently remained positive for up to 20 consecutive days were in March and May 2023. On both occasions, the price of ETH broke through the $2,000 mark.
As of October 30, the current positive run has reached 16 days. If the whales maintain their dominance for another week, there’s a strong possibility that Ethereum’s price will surge toward $2,500 in November.
Predicting ETH’s Path to $2,500
From an on-chain perspective, the sustained demand from large investors could be the driving force behind Ethereum‘s push toward $2,500 in the coming weeks. The Global In/Out of the Money Around Price (GIOM) data, which categorizes ETH holders by their entry prices, aligns with this bullish outlook.
GIOM data reveals that the major obstacle on Ethereum’s road to $2,500 is the $2,100 sell wall. Approximately 9.1 million addresses have bought 38.84 million ETH at an average price of $2,102, which is close to the current yearly peak. Breaking through this resistance may trigger a significant rally, but it hinges on the bullish whales’ ability to intensify buying pressure.
On the downside, bears may aim for a retest of the $1,500 territory. However, the initial support level at $1,680 could pose a formidable challenge.
With 5.86 million holders having purchased 11.06 million ETH at an average price of $1,687, current market momentum suggests that they may choose to HODL. Nonetheless, the failure to defend this support level could potentially lead to a reversal toward $1,500.