Hanging below $1,300 for several weeks, Ethereum may see better days before the end of the year. Several features support this hypothesis. Overview in this article!
Ethereum in a great accumulation phase!
As Glassnode revealed yesterday, the number of Ethereum addresses with more than 10 ETH has increased. This Sunday, we went to count there almost 344,000 addresses of a crypto wallet with at least 10 ETH tokens. Record. The following graph shows the evolution of the number of these wallets with at least 10 ETH since 2016.
📈 #Ethereum $ETH The number of Addresses with 10+ Coins just reached ATH of 343,918
See the metric: https://t.co/6ggy1nLbSD pic.twitter.com/PqrbNYEMSZ
— glassnode alerts (@glassnodealerts) December 11, 2022
The rapid increase in the number of launches in the last few days proves that demand is still strong and that investors are really anchoring themselves in terms of accumulation. In addition to this, the number of active ETH addresses in recent weeks has also risen significantly. At the same time, the average age of ETH tokens gets an ascending step after a long period of decline. A feature that adds to the credibility of the accumulation hypothesis as well.
As of this writing, the ETH token is trading at $1,254. A price level that is still 75% lower than the all-time high was reached on November 16th. As a reminder, on this date, the token was flirting with the $4,900 mark, at a time when the crypto market was changing over $3,000 billion in market capitalization.
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ETH derivatives in high demand!
Market data also helps identify the sharp rise in demand for Ethereum derivatives. Open interest amounts therefore indicate that the return to volatility could come quickly after long weeks of sidelining.
The available data also allows us to highlight that the estimated debt ratio around ETH is rising. That meaning leverage is back on the asset. As a general rule, these data should be interpreted as an indicator of an increase in investor confidence. If we take the data from the Fear & Greed crypto indicator which measures market sentiment, it has been showing a slightly bullish trend for the past few days. As of this writing, the indicator is at 27/100.
Ethereum depends on macro data and FED!
It’s been the same song for the past several months: the dependence of risky markets on monetary policy decisions. If the internal data for Ethereum and the crypto market indicate a return to volatility, other external factors could also reinforce this dynamic. Starting with the publication of major macroeconomic data. In fact, it will be published tomorrow US inflation figures for November 2022. Markets are clearly expecting a continuation of the decline that started in June 2022.
For this new publication, the consensus is expecting inflation of 7.3% over a rolling 12 month period. The publication of these figures will continue at the Nutrition meeting scheduled the next day. For this final meeting of the year, economic players seem to be expecting a 50 basis point hike in prime rates. As a reminder, at the last meeting, the American central bank had already implemented such an increase, which started the dynamics of rate reduction after 4 consecutive increases of 75 basis points.
According to data from CME Group, 75% of economic players are considering a 50 basis point hike. This would give rates between 425 and 450 basis points. As shown in the diagram below: