- Ethereum (ETH) price surpasses $2,100, a first since August 2022.
- Investors weigh bear and bull case scenarios as ETH continues to rally.
The world’s second-largest cryptocurrency, Ethereum (ETH), has experienced a surge of over 10% in the last 24 hours, pushing its price past $2,100. This increase coincides with the successful implementation of the Shanghai hardfork, as the Ethereum blockchain maintains strength and stability.
The ETH price now extends its weekly gains to over 12%. As investors ponder their next move, both bear and bull case scenarios for Ethereum are worth considering.
The Bull Case Scenario for Ethereum
The total number of Ethereum remaining on exchanges continues to decrease, while ETH staking has increased. Crypto analyst Lark Davis notes that 16% of ETH is currently staked, a low number compared to other cryptocurrencies like SOL or ADA. If ETH staking doubles to 32%, it would require the purchase of every single ETH on exchanges, a bullish sign.
As Ethereum implemented the Shanghai upgrade, some investors began to unstake their ETH, particularly on exchanges like Kraken, which recently faced an SEC lawsuit and a $30 million penalty for offering staking services. However, Lark Davis explains that ETH deposits have been growing significantly on the other hand.
Ethereum on exchanges 18.05 million
Ethereum staking 18.15 million
Currently, 16% of ETH is staked, a low number compared to others like SOL or ADA.
If ETH staking doubles to 32% it will require the purchase of EVERY SINGLE ETH on exchanges.
B U L L I S H ! ! ! pic.twitter.com/qdOw0IXxZS
— Lark Davis (@TheCryptoLark) April 12, 2023
The Bear Case Scenario for Ethereum
On-chain data provider Santiment highlights the MVRV ratio (Market Value/Realized Value) as a potential warning sign for a correction. An MVRV score of 15% or more could indicate a higher probability of a downturn. Ethereum’s current MVRV score sits at 9.95%. While a score above 0 implies a risk of a drop, the current score isn’t too concerning. However, the 365-day MVRV score is at 29%, the highest level since December 2021.
Additionally, there has been a significant spike in the profit vs. loss transaction ratio for Ethereum. The Santiment report states that “there are 2.59 times as many transactions in profit vs. transactions in loss today,” the highest ratio since January 20th, when a minor correction occurred. This ratio is interpreted as a short-term bearish signal, as heavy profit-taking can temporarily push prices down.
Furthermore, the amount of ETH held by shark and whale addresses (holding between 10k to 100k ETH) has been declining over the past month, signaling bearishness.