Taking X on April 26, an analyst Remarks that there is a high probability that Ethereum will rise in the coming sessions due to decreasing sell-side liquidity on major centralized exchanges like Binance and Coinbase.
Thin Sell Side, Big Potential Move for ETH
Decreasing sell-side liquidity, as evidenced by CEX order books, means few sellers are willing to liquidate. With few sellers in the market, a small increase in demand could theoretically send prices skyrocketing.
However, market makers could address this imbalance by examining how the market operates. At the same time, prices are not guaranteed to rise again even if they remain unchanged.
Unlike new meme coins, for example, Ethereum is extremely liquid; it is the second largest coin by market capitalization, behind Bitcoin. This means that billions will be needed to push prices above the immediate resistance levels of $3,300 and $3,700, as the daily chart clearly shows.
Ethereum has been under pressure for most of April following a decline from its all-time high of $4,090. Looking at the development on the daily chart, the coin is down 23% from all-time highs, finding strong rejection by the average BB – or 20-day moving average.
Analysts expect buyers to take over and reverse losses from mid-April if a global breakout above $3,300 is marked by volume expansion. Otherwise, ETH risks falling below $2,800, which corresponds to the sell-off on April 12-13.
Ethereum ETF launches in Hong Kong and adoption fuels optimism
However, traders are generally optimistic, anticipating a price rebound in the coming months. Several factors could propel ETH prices higher. A major catalyst is the highly anticipated launch of Ethereum spot exchange-traded funds (ETFs) in Hong Kong. Similar to the impact of spot Bitcoin ETFs on BTC prices, this product for ETH could support the coin, allowing traditional investors to gain exposure to the world’s second most valuable coin.
In the United States, the biggest obstacle preventing the Securities and Exchange Commission (SECOND) of the approval of a similar product is the uncertainty of the classification of ETH. On April 25, ConsenSys sued the regulator, urging it to classify the part as a commodity.
Beyond the launch of this product by the end of the month, Ethereum’s main strengths remain. Continued adoption of Ethereum and Layer 2 scaling solutions continues. As more protocols choose to deploy on the smart contract platform, it raises optimism about Ethereum’s long-term viability and growth.
Featured image from Canva, chart from TradingView
