Following a rejection at $4,946 on August 24, Ethereum (ETH) is now trading in the low $4,000 level. However, some analysts are still hopeful that ETH is likely to surge beyond $5,000 in the coming weeks, thanks to its rising illiquid supply and positive exchange-traded fund (ETF) momentum.
Ethereum To Hit $5,500 In September?
According to a CryptoQuant Quicktake post by contributor Arab Chain, Ethereum’s latest upswing in August which pushed the digital asset from a range of $3,700 – $4,000 to its latest all-time high (ATH) of $4,946, was largely buoyed by broader market rally and positive ETF inflows.
Related Reading
The analyst noted that ETH reserves on Binance crypto exchange witnessed a sharp uptick in August. The quick surge in inflow of tokens to the exchange shows that holders are choosing to sell or take profits at higher prices.
Arab Chain shared the following chart which shows both liquid (green) and illiquid (beige) ETH supply. According to the chart, the vast majority of ETH supply remains illiquid, creating a structural supply shortage.
On the other hand, the chart shows a slight increase in the liquid supply, suggesting that a portion of ETH has returned to circulation and could add to short-term selling pressure. The analyst remarked:
The overall illiquidity of the supply reinforces the long-term bullish outlook. Short-term cautionary signals – rising Binance reserves combined with a small increase in liquid supply – suggest a potential correction after the recent strong upswing.
If the growth in ETH reserves on Binance shows signs of slowing down or withdrawals resume, the digital asset’s supply shortage will remain pronounced. Consequently, a clear and decisive break above the $4,800 resistance level could propel ETH toward $5,200 – $5,500 in the near term.
The CryptoQuant analyst concluded by saying that September is likely to witness sideways to a slightly bullish move for ETH between $4,300 to $5,000. However, a failure to break through the $4,800 level – coupled with rising exchange reserves – could raise the possibility of a correction to $4,200.
What’s In Store For ETH?
While a breakout above $4,800 is possible, some analysts are tempering their expectations by saying that ETH may test the psychologically important $4,000 level before resuming its uptrend.
Related Reading
Meanwhile, on-chain data shows whales accumulating ETH at record pace. According to a recent report, ETH whales added a whopping 260,000 ETH to their wallets on September 1.
Offering a more ambitious prediction, Ethereum co-founder and ConsenSys CEO Joseph Lubin recently said that “ETH will likely 100x from here.” At press time, ETH trades at $4,429, up 2% in the past 24 hours.
Featured image from Unsplash, charts from CryptoQuant and TradingView.com
💸 Earn Instantly With This Task
No fees, no waiting — your earnings could be 1 click away.
Start Earning
