On April 26, an analyst discussed the potential for Ethereum to spike in the near future due to decreasing sell-side liquidity on major centralized exchanges like Binance and Coinbase.
Thin Sell-Side, Big Potential Move For ETH
Thinning sell-side liquidity on exchanges means that there are fewer sellers looking to liquidate. This imbalance could lead to a significant price increase if demand rises.
However, market makers could potentially fill this gap by balancing the market, and there is no guarantee that prices will spike even with limited sellers.
Unlike newer meme coins, Ethereum is highly liquid and the second-largest coin by market cap after Bitcoin. This means a considerable amount of capital would be required to push prices above key resistance levels as shown on the daily chart.
After a decline from its all-time high of $4,090, Ethereum has faced pressure throughout April. The coin is currently down 23% from its peak, facing resistance at the 20-day moving average.
Analysts anticipate a potential reversal in mid-April losses if ETH breaks above $3,300 with increasing volume. Failure to do so could result in a drop below $2,800, aligning with previous sell-offs in April.
Spot Ethereum ETF Launch In Hong Kong, Adoption Fuel Optimism
Despite the challenges, traders are optimistic about a price recovery in the coming months. The launch of spot Ethereum exchange-traded funds (ETFs) in Hong Kong is a major catalyst expected to boost ETH prices, similar to the impact of Bitcoin ETFs on BTC prices.
In the US, regulatory uncertainty around ETH’s classification is hindering the approval of similar products by the SEC. ConsenSys recently filed a lawsuit urging the regulator to classify ETH as a commodity.
Apart from upcoming product launches, Ethereum’s fundamental strengths, including ongoing adoption and scaling solutions, provide optimism for the coin’s long-term growth.
Feature image from Canva, chart from TradingView
