- ETH selling pressure has eased post-inauguration.
- But demand was yet to pick up; Is a recovery possible?
Ethereum [ETH] struggled to keep up with Bitcoin in the second half of January.
In fact, Bitcoin [BTC] topped an all-time high of $109.5K, but ETH was still down nearly 20% from its recent peak of $4.1K. However, the altcoin could be primed for a recovery amid renewed buying interest.
According to Joao Wedson, founder of the on-chain analysis firm Alphractal, ETH selling pressure has decreased significantly, which could accelerate its recovery.
“Selling pressure in ETH has eased slightly, giving buyers a short-term advantage. If buying pressure returns, it will rise quickly.”
Source: Alphractal
The shared chart indicated ETH price action alongside its buying and selling pressure. On the 19th of January, ETH saw a pre-inauguration sell-off (red trough) but eased afterwards (green peak).
This revealed that selling abated, but there wasn’t a strong demand to drive ETH upwards.
Sentiment amid EF restructure
Away from price charts, the Ethereum Foundation (EF), a non-profit outfit designed to support ecosystem functions and operations, hit the headlines this week.
EF has been under relentless pressure for constant ETH dumps and a lack of transparency and direction.
However, Vitalik Buterin recently announced an overhaul of EF to align with ecosystem needs. Some appeared dissatisfied with the planned changes.
According to Kyle Samani, founder of crypto VC firm Multicoin Capital, there was a ‘lack of urgency’ from EF.
“There is still a total lack of urgency, EF leadership is not in touch with the needs of its core constituents, and there is still no North Star”
That said, ETH users appeared optimistic about the altcoin’s prospects following EF changes, as revealed by an uptick in positive weighted sentiment. This could boost the recovery odds.
Source: Santiment
So, is strong ETH demand likely to drive the recovery? We checked the Coinbase Premium Index, a metric that tracks U.S. investors’ appetite for the altcoin.
As of this writing, the indicator bounced from negative territory to neutral. Any further advancement by the indicator could suggest increased U.S. demand and likely fuel the awaited recovery.
Source: CryptoQuant
That said, ETH price action was below key Moving Averages (MA), implying that a short-term bearish trend was still intact at press time.
A surge above the MA could reinforce bullish conviction and make the $3.5K and $3.6K targets within reach. However, the $3K level could be tapped if bearish pressure persisted.
Source: ETH/USDT, TradingView
Credit: Source link
