The price of ETH has certainly hit the gas in recent months, and is currently approaching $ 600. However, you are wondering what to expect in the short and medium term. Here are some ‘signs’ on what might give us a clue about the future of Ethereum.
Analyzing Ethereum’s performance
If you’ve been tracking Ethereum’s performance lately, you’ve probably noticed with great disappointment how it failed to stay above $ 600. Yes, we know, a lot of broken hopes. However, we strongly believe that the outlook is still optimistic for a new all-time high. So far, ETH has a much higher price than last month, seeing the “big picture” always helps to know where we are.
A good practice to define whether or not to give up on your hopes with ETH is to monitor the use of the Ethereum network. That is, you can analyze the volume of transactions that take place in it in a given period, as this can give us a clue of demand. So far there has not been a considerable drop in this metric, so there is a good sign there.
Signs to watch for to determine Ethereum’s course. Is it time to bet on ETH?
The second signal that we can highlight is one that we normally cite in CryptoTrend when we talk about Bitcoin whales, which is the withdrawal of liquidity from the market. We consider this signal key due to the simple operation of the law of supply and demand.
ETH withdrawals from exchanges, and accumulation in unknown wallets or cold storages.
They indicate that an increase in the currency is expected. At the same time, this measure can even influence price increases due to the lower supply available. This is not always the case, but it is a trend. In that sense, it should be mentioned that there was a strong exit of ETH from exchanges. This lasted three months and resulted in the extraction of 4.3 million Ethereum from exchanges.
When ETH increased in price, the selling pressure to take advantage of profits increased. But, then on December 5, we saw again that the sales and introduction of Ethereum on exchanges fell. Finally, a few days ago, withdrawals exceeded deposits by 32,000 ETH. This is an indication of the unwillingness of traders to sell at current price levels.
Finally, we can mention the relation of the «put / call» option
By evaluating whether there is more activity in call options or put options, the overall market sentiment can be measured. Generally speaking, call options are used for bullish strategies, while put options for bearish ones. Simple.
A put / call ratio of 1.20 favors put options by 20%, which can be considered bearish. In contrast, an index of 0.70 indicates that the open interest on put options lags 30% relative to the more bullish call options, and therefore the trend is bullish. According to analysts, you should consider that the metric aggregates the entire ETH options market, including every month of the year.
As the price of ETH approaches $ 600, investors often look for downside protection, increasing the call option ratio. However, this time the indicator continued to grow in recent days, even approaching its 30-day maximum of 0.94.
At this point we must recognize that these are just some metrics or signals that you can monitor to define your strategy in the medium or long term with respect to Ethereum. They are not definitive, nor absolute, but it is advisable to use them.
So far, the safest conclusion to be had is that although ETH slowed its marked advance, investors are staying loyal to Ethereum and perhaps this could be the sign that a surge is expected to a new all-time high.
What do you think of these Ethereum (ETH) signals? Let us know in the comment box.