Ethereum Eyes $5,500 Amid Illiquid Supply Crunch And ETF Momentum

Following a rejection at $4,946 on August 24, Ethereum (ETH) is now buying and selling within the low $4,000 stage. However, some analysts are nonetheless hopeful that ETH is more likely to surge past $5,000 within the coming weeks, because of its rising illiquid provide and optimistic exchange-traded fund (ETF) momentum.

Ethereum To Hit $5,500 In September?

According to a CryptoQuant Quicktake publish by contributor Arab Chain, Ethereum’s newest upswing in August which pushed the digital asset from a variety of $3,700 – $4,000 to its newest all-time high (ATH) of $4,946, was largely buoyed by broader market rally and optimistic ETF inflows.

The analyst famous that ETH reserves on Binance crypto change witnessed a pointy uptick in August. The fast surge in influx of tokens to the change reveals that holders are selecting to promote or take income at larger costs.

Arab Chain shared the next chart which reveals each liquid (inexperienced) and illiquid (beige) ETH provide. According to the chart, the overwhelming majority of ETH provide stays illiquid, making a structural provide scarcity.

On the opposite hand, the chart reveals a slight enhance within the liquid provide, suggesting {that a} portion of ETH has returned to circulation and will add to short-term promoting stress. The analyst remarked:

The total illiquidity of the availability reinforces the long-term bullish outlook. Short-term cautionary alerts – rising Binance reserves mixed with a small enhance in liquid provide – counsel a possible correction after the current sturdy upswing.

If the expansion in ETH reserves on Binance reveals indicators of slowing down or withdrawals resume, the digital asset’s provide scarcity will stay pronounced. Consequently, a transparent and decisive break above the $4,800 resistance stage might propel ETH towards $5,200 – $5,500 within the close to time period.

The CryptoQuant analyst concluded by saying that September is more likely to witness sideways to a barely bullish transfer for ETH between $4,300 to $5,000. However, a failure to interrupt by the $4,800 stage – coupled with rising change reserves – might elevate the opportunity of a correction to $4,200.

What’s In Store For ETH?

While a breakout above $4,800 is feasible, some analysts are tempering their expectations by saying that ETH might take a look at the psychologically vital $4,000 stage earlier than resuming its uptrend.

Meanwhile, on-chain knowledge reveals whales accumulating ETH at report tempo. According to a current report, ETH whales added a whopping 260,000 ETH to their wallets on September 1.

Offering a extra formidable prediction, Ethereum co-founder and ConsenSys CEO Joseph Lubin lately said that “ETH will possible 100x from right here.” At press time, ETH trades at $4,429, up 2% previously 24 hours.