As of 16:00 on October 6, 2023, Beijing time, the price quote of eth usd was $1,600, a decrease of 1.5% 24 hours ago. (Data source:) CoinMarketCap), the high of the day reached $1,620 (+1.25%), and the low of the day dropped to $1,580 (-1.25%). The price volatility (standard deviation) was 1.2%, higher than 0.9% on the 30-day average. Ethereum’s total market capitalization in circulation is 192 billion US dollars, and it has a 24-hour trading volume of 8 billion US dollars. 34% (2.72 billion US dollars) and 18% (1.44 billion US dollars) of it are traded on Binance and Coinbase Pro, respectively. Today’s atypical price movement occurred within the time frame of 11:00-12:00. Affected by the United States’ September non-farm payroll data, which was unexpected, eth to usd rose 2.5% from $1,590 to $1,630 briefly, before pulling back to the area around 1,600.
According to on-chain data, the Ethereum network processed 1.2 million transactions today (8% more than yesterday), and the average Gas fee dropped to 15 Gwei (about 1.2 US dollars), suggesting the relief of network congestion. Santiment monitored that 327 large transactions of more than 1,000 ETH in value (year-over-year up 20%) with a total value of 520 million US dollars were made, 55% of which went to exchanges (selling pressure signal). Meanwhile, the number of addresses holding 100-1,000 ETH increased by 0.8%, and the percentage of holdings increased to 18.5% of the circulating supply, which can provide short-term support for the price.
Technical indicators point to a stalemate between bulls and bears. The 4-hour RSI of eth to usd is 49 (neutral zone), and the MACD histogram converges towards the zero line without any direction. The resistance is at $1,650 (September high), and the support is at $1,550 (200-day moving average). TradingView statistics show that breaking above $1,620 will trigger the liquidation of $380 million in short contracts (Source: CoinGlass); Breaking below $1,580 would cause a $250 million long margin call.
Market sentiment is event-driven. The term “Ethereum” on the Twitter platform was mentioned 280,000 times today (35% more than yesterday), and positive emotions accounted for 62% (data tool: LunarCrush). However, cryptocurrency’s fear and Greed index dropped from 52 to 48 (neutral to bearish), possibly due to the 2% decline in Bitcoin during the same period. Bloomberg reported that the Ethereum Core Developer Conference is promoting the “Dencun Upgrade” which will be released in Q1 2024 and can reduce Layer2 transaction fees by 90%. These facts have pushed ETH staking volume to 28 million (taking up 23% of circulation).
Macroeconomic pressure is containing the upside range. The 10-year US Treasury note yield increased to 4.8% (its highest point since 2007), putting pressure on the risky assets’ valuations. According to the Morgan Stanley model, when the Federal Reserve raises interest rates by 25 basis points in November, the total market capitalization of cryptocurrencies can fall by 12%-15%, causing eth to usd go below $1,500. However, the 30-day correlation between ETH and the Nasdaq index is 0.45. When tech stocks recover by 5%, ETH can rise by 2.2% as well.
Operation suggestion: If eth to usd is held above $1,580 (38.2% Fibonacci retracement level), it can be bullish to $1,650 in the short term (risk-reward ratio 1:3); If it goes below the support level of $1,550, it will test the psychological level of $1,500. Derivatives traders are advised to take note of the fact that implied volatility of ETH options on Deribit exchange rose to 70% (60% yesterday), meaning the market is expecting the price range of fluctuation to expand to $1,520- $1,680 next week (68% probability).