- ETH selling pressure begins to mount after hitting a wall of resistance.
- ETH 2.0 absorbs some of the ETH liquidity as leveraged traders adjust to the current risk.
March was quite an interesting month for the crypto market and especially for ETH. But as the month draws to a close, it’s important to reflect on the performance of Ethereum and ETH, which can provide insight into what to expect in April.
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From a price point of view, ETH managed to break the $1,800 price level several times over the past two weeks. However, it is meeting resistance above the same level.
Similar past instances where ETH hit a ceiling in its uptrend earlier this year resulted in a significant pullback. Under that logic, ETH would be about to experience an increase in selling pressure.
Source: TradingView
ETH’s MFI is already indicating some outflows over the past few days. Some on-chain data is also consistent with these observations. According to the latest Glassnode data, the number of ETH sending addresses is currently at a 4-week high. This may indicate an increase in selling pressure.
📈 #Ethereum $ETH The number of shipping addresses (7d MA) just hit a 1-month high of 13,560,530
The previous 1-month high of 13,559,560 was observed on March 30, 2023
View statistics:https://t.co/JCCfrCxZ4J pic.twitter.com/ORLVSXQ8WP
— glassnode alerts (@glassnodealerts) March 31, 2023
Outflow only has a pronounced impact if the inflow is low. Daily on-chain exchange flow data shows ETH outflow was slightly higher at -$7.8 million.
This is a reflection of the exchange flow statistics showing a decline in both inflows and outflows from the exchange. However, the exchange inflow was higher at 112006 ETH compared to 91514 ETH flowing out of the exchanges in the past 24 hours.
Source: CryptoQuant
The supply of ETH in ETH 2.0 deposits rises to a new monthly high
While exchange rates confirm that there is some selling pressure in the market, longer-term observations remain in favor of the bulls. For example, the total value of ETH locked up in ETH 2.0 deposit contracts is currently at a new all-time high.
This confirms that the market is still experiencing some demand and, more importantly, that ETH is flowing into DeFi.
📈 #Ethereum $ETH The total value in the ETH 2.0 deposit contract just reached an ATH of 17,163,591 ETH
View statistics:https://t.co/SzbMPqvhlb pic.twitter.com/BplykQzN7g
— glassnode alerts (@glassnodealerts) March 31, 2023
How much are 1,10,100 ETHs worth today?
But what about the situation in the derivatives market? Well, ETH’s open interest fell to its lowest Q1 level in the second week of March.
It has since recovered and confirmed healthy demand in the derivatives segment. However, it fell slightly in the last two days after the price hit resistance.
Source: CryptoQuant
Meanwhile, the level of leverage in the market recently rebounded this week after previously falling to its lowest Q1 level. Confirmation that ETH’s recovery from the second week of March was supported by remarkable leverage.
This could explain why the estimated leverage ratio has fallen slightly over the past two days due to the expectation of a retracement.