- Ethereum bulls take a break as the market cools off after a massive rally.
- CME's ETH future listing causes a chasm within the cryptocurrency community regarding an incoming price crash.
- On-chain transactional data suggests a bounce is likely due to strong buyers' concentration around the current price levels.
Ethereum price has seen an impressive 135% rally since the beginning of the year. Now that ETH has surpassed its previous all-time high of $1,400, everything seems to be lining up for an upswing towards $2,000 or higher.
CME's listing increases fears among investors
Chicago Mercantile Exchange (CME) recently announced the listing of Ethereum futures on February 8. As this date nears, the cryptocurrency community is divided into two sectors, those that believe that ETH price will crash after the listing and others who think that it will continue trending upward.
Alex Kruger, a renowned technical analyst, belongs to the latter group. Kruger maintains that the market is "now more mature" than when CME listed Bitcoin in December 2017. The prominent chartist also believes that ETH is a high beta asset that follows Bitcoin price action.
On the other hand, JPMorgan Chase's global market strategist, Nikolaos Panigirtzoglou, isn't as optimistic as Kruger. He noted on February 2 that initial volumes are likely to be low and added that the listing could witness "negative price dynamics."
For most of December and January, Grayscale stayed away from Ethereum, expecting a significant downswing in prices. However, the investing company has started accumulating ETH as the CME's listing date approaches.
Grayscale now holds over 3 million in ETH with more than $4 billion.
Ethereum price targets $2,000
As the over-leveraged market takes a break, Ethereum is now trading outside of an ascending triangle on the 1-day chart. Since the break out of this technical pattern, ETH price has risen by 21%.
Despite the significant gains incurred, its uptrend is far from over.
ETH/USD 1-day chart
If bulls can defend $1,650, ETH will likely continue climbing towards $2,000 or higher.
Based on IntoTheBlock's In/Out of the Money Around price (IOMAP) model, holding above this critical support level will be easy. This on-chain metric shows buyers' strong presence between $1,500 and $1,650, where roughly over 400,000 addresses previously purchased nearly 10 million ETH.
Investors around this area deem Ether as a good investment opportunity. Hence, any short term pressure is likely to be cushioned by such holders who may purchase more tokens around this price level.
Ethereum IOMAP chart
While everything seems bullish for Ethereum, one bearish scenario, in particular, cannot be neglected. A crash in Ethereum price following the listing of CME's ETH futures could cause a price collapse below the $1,650 support zone.
If this were to happen, it could set ETH back anywhere between 5% to 15%. The global IOMAP shows strong support at $1,300. Here, 3.35 million addresses bought around 23 million Ether.
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