ETH Moves Toward $3,300 as Institutional Demand Tightens Supply

Ethereum is on the cusp of this next phase because the Strategic Token Reserves and ETH ETFs cumulatively possess 10.74% of the total supply in the form of the token, which is estimated at $40.4 billion at the current prices, indicating that these token reserves are no longer circulating due to their strategic or institutional holdings.

Source: X

Due to the lowered distribution of the token due to the transition to the proof-of-stake system, in addition to the burning of the token, such a trend will help to increase the scarcity of the token. Due to the lowered liquidity in the market, prices can be driven by long-term allocations rather than market speculations.

Also Read: Ethereum Price Strengthens After $960 Million Binance Inflow and Strong ETF Activity

ETH Price Consolidation Points to Potential Breakout

However, the crypto analyst, Crypto Bully, pointed out that more than forty days have passed with the token inside a consolidation phase with no strong break, which is a good sign in the run-up to the start of the year. The level being maintained with reduced selling pressure and a lengthy consolidation phase leads to a strong directional move for the token price.

Source: X

The limelight is now on the critical levels, which play an important part in shaping the future course of action for the token. A sweep through the former low of the last quarter, around $2600, would be an outstanding high-probability trade, while a breach above $3200 would be an indication of a breakout and would boost support for purchases across the market.

Ethereum Consolidation Continues With $3.3K in Focus

Moreover, another crypto analyst, Daan Crypto Trades, revealed that the token is positioned at a very crucial point in price action as it is being compressed between two very important levels. The resistance that must be overcome in order for the price to reverse in a bullish manner on a larger timeframe would be $3,300.

Source: X

On the negative side, the support remains at the November low of $2,600. The actual danger area is within this trading range, as misleading breakouts will cause a drain of funds. A trader’s patience will pay off as they will be able to sense market direction and then take action.

Also Read: BitMine Stock Surges 14% as Firm Stakes Another $259M in Ethereum