Ethereum Market Update: ETH continues to consolidate position below $360

DeFi surpasses Ethereum in media mentions 

The ongoing boom in decentralized finance (DeFi) space has been very beneficial for Ethereum. The demand for ETH has continuously surged in recent times. However, it is DeFi that’s dominating the headlines in the media and not Ethereum. 

While the media mentions of Ethereum are on the rise, it is nothing compared to DeFi mentions. 

The surge in DeFi demand has resulted in skyrocketing gas prices. Uniswap recently launched its UNI token and gave away 400 free tokens to early users of the platform. To access these tokens, users needed to pay extremely high ETH fees to move the UNI to and from any destination to sell it. This caused Ethereum gas fees to spike exponentially in a short period. 

Some believe that the surging gas prices and Ethereum activity will keep DeFi in media headlines for a long time. 

So, why is this good for Ethereum?

Ethereum’s primary purpose is to be the platform that fosters the creation of sophisticated decentralized apps. Similar to how the internet facilitated the creation of Google, Facebook, etc., Ethereum hopes to be a platform that fades into the background, allowing its applications to shine through. While this is a small step, it’s a major step in the right direction.

DeFi TVL

TVL is a metric that stands for “Total Value Locked” in DeFi smart contracts. The TVL has surpassed $11B this Tuesday. Currently, the total value locked is around $11.11 billion. The leading DeFi protocol, as of now, is Uniswap with more than 18.75%.

ETH/USD daily chart

After crossing above the downward trending line and is consolidating below the $365 resistance level. The price is trending horizontally around $355. The MACD shows that market momentum has reversed from bearish to bullish. This shows us that while the price is prepping itself for a possible bullish breakout following this consolidation period.

ETH/USD 4-hour chart

The 4-hour chart shows us that the price plummeted from $365 to $355 over two sessions breaking below the upward trending line. After this drop, the price is trending horizontally around the $355-level. 

Where all can we expect this price to go? For that, we need to look at ETH’s IOMAP.

ETH IOMAP

IntoTheBlock’s “In/Out of the Money Around Price” (IOMAP) model reveals there is a healthy supply barrier a$348 that will prevent the second-largest cryptocurrency by market cap from dropping any time soon. At this level, roughly 422,200 addresses are holding 10.17M ETH.

On the upside, there is a moderate-to-strong resistance level at $360, where around 665,000 addresses have purchased around 4.33M ETH. If the bulls somehow break past this wall, the price may gain enough momentum to breach the $400-level.

ETH whale and miner balance

The graph above shows you the miner and whale balance distribution chart. The amount held by whales has risen by 23.17M on July 23 to 28.45M on September 28. While this may not have a direct 1:1 correlation with the price, this is still a positive sign. This shows us that the whales are consolidating their positions instead of just selling off. 

Now, let’s look at the total balance held by miners. The balance reached a low of 1.07M on September 2, in the three-month time frame. 

From this three month-low, the miner balance reached up to 1.12M as of press time. This shows us that the miners are not selling off their ETH to stay competitive in the market. With the miners and the whales holding on to their ETH tokens, we can expect positive repercussions on the price.