Ethereum (ETH) Price to Break $4,000 After Bitcoin’s Latest Move?
Ethereum (ETH) price moved above $3,525 on Feb 29, to cap its gains for the month at 56%. Interestingly, on-chain data trends show that investors remain reluctant to book profits, instead they are holding out for more upside as prices consolidate within the $3,300 – $3,450 range.
With investors increasingly turning attention towards the altcoin markets, will it Ethereum price above the $4,000 milestone target?
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Bitcoin Dominance (BTC.D) Has Dipped 2% in 3-days
After Bitcoin price hit a 3-year peak of $64,000 on Feb 28, over 99% of the existing holders entered profit positions. Interestingly, a number of those investors have started reinvesting those gains into other alternative crypto assets.
In further affirmation of this stance, market data trends shows that since Feb 29, Bitcoin share of the crypto market has entered a steep decline.
TradingViews’ Bitcoin Dominance chart (BTC.D), weighs the value of Bitcoin’s current market capitalization in comparison to the rest of the global crypto market.
As depicted in the chart below, after the BTC price crossed $64,000 on Feb 28, BTC.D has declined by 2% to hit a weekly low of 53.5% at press time on March 2.
This decline in Bitcoin dominance suggests that investors have started to rotate their profits into altcoins with high-growth prospects.
As the second largest crypto asset by market capitalization, Ethereum price stands to make significant gains from this rare market dynamics.
Unsurprisingly, ETH holders have shown resilience amid the mild pullback experienced in the last 3 trading days.
Ethereum Investors Reluctant to Book Profits Despite Price Hitting 2-Year Peak
Thursday February 29 marked the first time Ethereum price hit $3,500 since April 2022. But remarkably, the move was quickly followed by a mild-pullback resulting in a tepid start to March 2024.
In contrast to Bitcoin (BTC) which saw its long-term investors carry out their highest profit-taking in 45 days, ETH investors have opted to hold amid the market retracement..
Santiment’s Age Consumed metric, tracks long-term investors trading activity, by multiplying the number of coins recently-moved by the number of days since they were last traded.
As seen below, Ethereum Age Consumed values have dropped from 54% from 151.8 million to 69.8 million between Feb 28 and March 1.
Declining values of the Age Consumed typically means that investors are generally holding their coins longer. More so, if it occurs while an asset is trading at a 3-year peak as observed above, it signals an overwhelming bullish conviction among long-term investors that prices will rise even higher.
Evidently, the positive narratives surrounding the widely-anticipated Ethereum ETF approval, and the Dencun upgrade launch now slated for March 13, may have influenced the investors outlook.
Prediction: Can ETH price reach $4,000 in March 2024?
As things stand, Bitcoin investors redirecting capital towards altcoins, and existing investors are reluctant to sell. These two factors could combine to form a major catalyst for Ethereum price to move above $4,000 in March 2024.
This bullish Ethereum price prediction is further affirmed by IntoTheBlock’s Global In/Out of The Money metric, which groups all existing Ethereum investors according to their entry prices.
However, it shows that the bulls must scale the initial resistance at $3,600. As seen below, 235,680 existing holders had bought 593,350 ETH at the minimum price of $3,624, forming the largest cluster of potential profit-takers within 20% boundaries of the current prices.
But if the bulls capitalize on the two potential catalysts analyzed above, ETH price will likely smash through the $3,600 resistance in March 2024 and advance towards $4,000.
On the flip side, the bears could negate this optimistic forecast if they can force a downswing below $3,000.
But this appears far-fetched in the short-term, considering the looming buy-wall mounted by the 1.84 million addresses who had acquired 4.3 million ETH at the $3,118 territory.