Ethereum Sell Side Liquidity Thinning On CEXes: Time For $4,000?

On April 26th, an analyst spoke about X. Note Ethereum is likely to soar in the coming sessions as sell-side liquidity thins across major centralized exchanges such as Binance and Coinbase.

Sell ​​side thin, big move possible for ETH

Thin sell-side liquidity, as seen in the CEX-wide order book, means there are few sellers willing to liquidate. With so few sellers on the market, even a small increase in demand could theoretically send prices skyrocketing.

Decline in ETH sell-side liquidity | Source: X analyst

Still, market makers may be able to bridge this imbalance by considering how the market works. At the same time, there is no guarantee that prices will continue to rise.

For example, unlike new meme coins, Ethereum is highly liquid. It is the second largest coin after Bitcoin in terms of market capitalization. This means that it will take billions of dollars to push the price above the immediate resistance levels of $3,300 and $3,700, as clearly shown on the daily chart.

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 its all-time high and we see a strong rejection from the central BB, his 20-day moving average.

Ethereum price trending sideways on daily chart | Source: ETHUSDT on Binance, TradingView
Ethereum price trending sideways on daily chart | Source: ETHUSDT on Binance, TradingView

Analysts expect buyers to carry over and reverse mid-April losses if expanded volume indicates a comprehensive breakout above $3,300. Otherwise, ETH risks falling below $2,800 in line with the decline on April 12th and 13th.

Spot Ethereum ETF launched in Hong Kong, introduction fuels optimism

However, traders are generally bullish and expect prices to recover in the coming months. Several factors could push up his ETH price. The main impetus was the launch of the long-awaited Spot Ethereum Exchange Traded Fund (ETF) in Hong Kong. Similar to the impact a Spot Bitcoin ETF has on BTC prices, this product for ETH will support Bitcoin, allowing traditional investors to gain exposure to the world’s second most valuable coin. there is a possibility.

In the United States, the biggest hurdle preventing the Securities and Exchange Commission (SEC) from approving a similar product is the uncertainty of ETH’s classification. On April 25, ConsenSys filed a lawsuit asking regulators to classify the coin as a commodity.

Not only will this product be launched by the end of this month, but Ethereum’s core strengths still remain. The adoption of Ethereum and Layer 2 scaling solutions continues. As more protocols choose to deploy on the smart contract platform, it fuels optimism for Ethereum’s long-term viability and growth.

Featured image from Canva, chart from TradingView

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