Ethereum price on track to $10,000 rally, despite low on-chain activity

Ethereum price recovered from its slump and made a comeback above $1700.
Analysts believe Ethereum price is on track to a bullish target of $10,000, according to Elliott Wave Theory.
Exploring the connection between stablecoin DAI velocity and low levels of on-chain activity on Ethereum, analysts believe ETH is in hibernation.

Ethereum blockchain has witnessed a drop in on-chain activity. Despite the slump, Ethereum price recovered from its down trend and climbed above the $1700 level. Analysts are bullish on a breakout in Ethereum.

Ethereum climbs above $1,700

Leading cryptocurrency analyst Dr. Arnout Ter Schure applied the Elliott Wave Principle and set a target for Ethereum around the $2300 level.

The Elliott Wave Principle is an analysis of long-term trends in price patterns and helps identify and predict waves that reveal probable outcomes for future price movements. It reveals highs and lows, looking for patterns in prices. Applying this principle to Ethereum price trend, the analyst argues the altcoin is wrapping its last fourth and fifth waves. When the wave is complete, the analyst expects Ethereum price drop ideally to the $1,500 level and the end of the fourth wave is $2,150.

ETHUSD

ETHUSD chart

Once Ethereum completes the last minute wave 5, it would technically complete the correction that started in November 2021. A break back above $2,150 would confirm rally to $10,000 level.

Ethereum records extremely low fees

After a bloodbath in the crypto market, Ethereum recorded extremely low fee levels. Based on a report from crypto intelligence platform Santiment, there is very little activity on the Ethereum network. Analysts have observed a connection between low levels of activity and stablecoin velocity.

ETH price- DAI velocity

Ethereum price- DAI velocity

Velocity is a measure of how quickly money is circulating in the crypto economy. The current level, stablecoin (DAI) velocity and low level of on-chain activity on Ethereum indicates hibernation. Analysts believe bears are asleep and waiting for a trigger.

To conclude, Ethereum bears are currently inactive and awaiting a trigger in the altcoin's price trend. A spike in DAI velocity can be considered a trigger for an Ethereum price rally.

@BitQueenBR, a crypto analyst and trader believes after a drop to $1400-$1500 level, Ethereum price could rebound. Until then, the analyst expects a downtrend in Ethereum price.

$ETH measured move reached, expecting a little more downside until we get a proper bounce arround $1400-1500ish. pic.twitter.com/Txisy61zGL
— BitQueenBR (@BitQueenBR) May 27, 2022

Share: Cryptos feed

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.