Ethereum price soars above $3K into ‘red zone’
Extending its upside rally, Ether (ETH) has crossed above $3,000 on August 7.
What is Ether’s three month high has actually triggered the crypto coin’s incredible upside trend while boosting the possibilities of it facing a bearish backlash.
Predicting a downside outlook, an on-chain indicator that keeps track of it has said through ‘Ethereum: Percent of Addresses in Profits” that Glassnode has reached 96.4% while ETH/USD is witnessing the ongoing price rally.
Chief Investment Officer at Moskovski Capital, has recently highlighted the metric’s capability of predicting Ethereum highs and lows. However, if one notes, whenever Glassnode indicator managed to cross the 90%-threshold, it resulted in profits for Ether investors. He was quoted saying that they are back to the red zone, which is “historically associated with local tops,” while referring to Glassnode’s official charts.
Mokovski also added that the price would most probably remain near its present highs, around $3,000, for a while. His outlook has also highlighted traders’ intentions to keep Ether, precisely due to the excitement surrounding its software upgrade, which has increased deflationary pressure to ETH.
The optimism surrounding the London hard fork is rooted in an increasing scarcity that would have made ETH more valuable in future, particularly against a vast demand.
In addition, the London upgrade is set to divide some 13,000 new Ether tokens, which were issued for paying to miners’ gas fees, into three parts. One of the parts is the base fee users pay for conducting ETH transactions that the upgraded Ethereum protocol will now burn.
Ethereum’s current transition from a proof-of-stake mechanism to cheaper and faster PoS would also reduce active Ether supply from the market. The PoS mechanism prompts operators for depositing 32 ETH as a smart contract stake for running the blockchain. In return, the protocol rewards annual yields to the depositors.
Moskovski also hinted that traders would now find Ether holdings more appealing than securing interim profits because ETH/USD currently trades 79.82% above its July bottom of $1,718.
Analysts also noted that Ether’s latest score above $3,000 had pushed its Relative Strength Index (RSI) into an overbought area.
RSI actually lets traders measure a particular asset’s trend momentum for evaluating its overbought and oversold condition. Simply put, if traders interpret above 70 reading as overbought, it is a cue to sell that asset. Alternatively, RSI below 30 indicates a buying opportunity because of the asset’s oversold conditions.
Ether’s daily RSI currently sits around 79.
