Ethereum is Closer to $1,900 Than You Think. Here’s Why

Ethereum hovered below $2,300 for most of the day. It broke the highlighted mark a few minutes ago and may look to continue upward.

However, it is worth noting that the largest altcoin recovered from a dip to $2,200 a few hours ago. It retraced as conflict in the Middle East enters a new phase. Recall that the asset broke below $2,000 on Sunday, following the closure of the Hormuz Strait, which many consider a significant escalation, as the maritime lane is responsible for over 20% of the world’s oil supply.

Iran went a step further a few hours ago. It decided to strike US military bases at different locations. Although there is no news of the damage it inflicted, the United States earlier stated that it would respond to any such attacks.

Investors fear that the conflict may persist for longer than expected and are planning new strategies to hedge against market risks. 

Data from DeFiLlama sheds more light on the unfolding trend. The total value locked has been growing daily since June 13. TVL reached a peak of 41.2 million ETH on Sunday as staking for passive income looks more attractive.

Although the metric has not displayed the DEX volume since June 19, there are indications that it may be significantly lower. Ethereum is experiencing a significant 28% decline in trading volume over the last 24 hours. 

Data from Lookonchain suggests that more investors are gradually shifting to a bearish stance. BlackRock joins this list after transferring 8,172 ETH worth over $18 million. It moved the assets to Coinbase Prime, selling for the first time after almost of consistent buying.

A report from CryptoQuant indicates that exchanges are seeing a notable increase in inflows. However, the outflows outweigh the influx, causing exchange reserves to decrease. This explains the rise in ETH’s price, noting that the bulls are soaking up the excess supply.

Ethereum See More Short Positions

Data from Coinglass shows traders bracing for price declines. Open interest is slightly up. However, more than 50% of the positions are short. The same trend unfolded on Sunday before the massive dip. Ethereum is yet to respond to this trend, as the spot market remains strong. 

This may have changed a few hours ago; short positions now outnumber the other. There is a shift as the bears are making a comeback. News of Qatar’s possible involvement in the ongoing conflict may be the trigger for this change.

Nonetheless, the order book shows a huge number of sell orders at $2,320. It explains why Ethereum remains stuck below $2,300.

However, the 1-day chart suggests that the asset must continue trading above its current mark or risk declines below $2k. Previous price actions suggest that the largest altcoin may break below $2,200 again, retracing to a low of $2,100. 

The Fibonacci retracement level supports this speculation. The metric highlights no support after $2,379. It hints at a decline to the 38% fib level at $2,145. A slip below this may lead to a drop to the 23% fib mark at $1,856. 

This coincides with the recent price action on Mar. 9. Ethereum opened the day at $2,203 but retraced to a low of $1,988. It dropped lower the next day, breaking the $1,900 support.

Both metrics reaffirm that a drop to $1,900 is likely if the asset loses the $2,100 barrier. 

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