What are the chances that Ethereum will reach $3000 this week?

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After trading 10% lower than the previous week’s price, Ethereum was trading at $2500. Price activity was mostly range-bound and was influenced by liquidity and volatility across exchanges. Liquidity remained low; 41 percent of ETH was held in the wallets of major investors. The buildup and removal of ETH balances from exchanges has promoted a positive narrative, but it has had an impact on liquidity. The daily transaction volume has decreased, which might be a crucial element contributing to the price action’s rangebound character.

 

Why Ethereum may hit $3000 this week

Bitcoin vs Ethereum mean transaction fees chart | Source: Twitter

Several measures, such as the mean fees for Ethereum and Bitcoin, support an optimistic narrative for Ethereum. The average cost has already reverted to levels seen in mid-2020. This is positive since it is the same level from where the price surge began. Other indicators, such as ETH OI, showed signs of improvement.

Why Ethereum may hit $3000 this week

ETH Futures OI open interest chart | Source: Skew

Options for ETH In comparison to the previous two weeks, open interest and ETH options trade volume were rather high. At the same time, the rise of ETH is affecting the rise of cryptocurrencies. DeFi initiatives and L2 scaling solutions are gaining traction. Since Bitcoin’s dominance stays at 41%, there has been a surge in investment in altcoins.

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Large exchange deposits are being made, which is flooding exchanges with lesser cryptocurrencies. This raises the liquidity of these cryptocurrencies. In contrast, an increase in the amount of exchange deposits may result in a further reduction in the price of Ethereum. If the ETH percent balance on exchanges rises, the price is likely to fall to the $2000 mark.

However, declining social traffic and social media mentions, as well as on-chain data, indicated a positive price story for ETH. Before rebounding to the $3500 level, the price is more likely to surpass the psychologically crucial $3000 mark. Besides large transactions on the network are up over 7%, which further supports the bullish narrative and the rally to $3000 before the weekend.

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