Thin Sell-Side Liquidity
An analyst predicts a potential spike in Ethereum’s price due to a decrease in sell-side liquidity on major exchanges like Binance and Coinbase. With fewer sellers, a small increase in demand could result in a significant price increase.
Factors Influencing ETH’s Price
Despite the thinning liquidity, market makers could balance the market. However, Ethereum’s high liquidity, being the second largest cryptocurrency by market cap, means it would require billions to push its price above immediate resistance levels.
Recent Price Movements
Ethereum has faced pressure since April, dropping from its all-time high of $4,090. It’s currently 23% below its peak, facing resistance from the 20-day moving average. Analysts anticipate a breakout above $3,300 with increasing volume to signal a reversal of April’s losses.
Positive Outlook
Traders remain optimistic about Ethereum’s future price. Factors driving this optimism include:
- Hong Kong Spot Ethereum ETF Launch: The launch of spot Ethereum ETFs in Hong Kong could attract traditional investors and boost the coin’s value.
- SEC Lawsuit: ConsenSys’s lawsuit against the SEC to classify Ethereum as a commodity could remove a barrier to ETF approval in the US.
- Continued Adoption: Ethereum’s ongoing adoption and the growth of Layer 2 scaling solutions support its long-term viability and growth potential.
