- Ethereum price has been trading within a 6% range for several weeks.
- On-chain analysis shows the weekly volatility at its lowest in six years.
- Using the weekly volatility indicators correctly could improve investors' opportunity costs in 2023.
Ethereum price is at a standstill as bulls and bears wrestle over minute price levels in the $1,200 region. On-chain analysis shows the tug-of-war price action is likely to continue.
Ethereum price needs volatility
Ethereum price has slowed down the erratic swinging behavior witnessed throughout 2022. Since December 19, the decentralized smart-contract token has been confined to a tightening range, ricocheting back and forth between $1,150 and $1,225. The 6% range has led traders to adopt a sidelined approach as the market provides fewer swing trading opportunities as the days progress.
Ethereum price currently auctions at $1,207. Santiment’s on-chain analysis tools provide further context for ETH’s lackluster price action. According to the new 2-week Price Volatility Indicator, ETH’s network liquidity has fallen to new all-time lows. According to the indicator, the average swing trade accumulates 0.01 ETH, the lowest reading in the Network's history this decade.
The last time ETH’s liquidity was in the 0.01 ETH range was August 24, 2016. Ethereum would decline from $11.67 to $ 7.53 before creating enough liquidity in the market to spark an upward market reversal. A similar 35% decline in current market would land Ethereum near $780.
Traders should consider keeping an eye on Ethereum's Volatility indicators before engaging in a buy-the-dip opportunity. Historically ETH's average liquidity 2-week ranges between 0.03-0.05 ETH for several weeks before a market reversal occurs. Ideally, a trader would maximize their opportunity cost and avoid getting trapped in stalemate price action if the indicator was correct.
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.
Recommended Content
Editors’ Picks
Bitcoin Weekly Forecast: BTC nosedives below $95,000 as spot ETFs record highest daily outflow since launch
Bitcoin price continues to edge down, trading below $95,000 on Friday after declining more than 9% this week. Bitcoin US spot ETFs recorded the highest single-day outflow on Thursday since their launch in January.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Solana Price Forecast: SOL’s technical outlook and on-chain metrics hint at a double-digit correction
Solana (SOL) price trades in red below $194 on Friday after declining more than 13% this week. The recent downturn has led to $38 million in total liquidations, with over $33 million coming from long positions.
SEC approves Hashdex and Franklin Templeton's combined Bitcoin and Ethereum crypto index ETFs
The SEC approved Hashdex's proposal for a crypto index ETF. The ETF currently features Bitcoin and Ethereum, with possible additions in the future. The agency also approved Franklin Templeton's amendment to its Cboe BZX for a crypto index ETF.
Bitcoin: 2025 outlook brightens on expectations of US pro-crypto policy
Bitcoin (BTC) price has surged more than 140% in 2024, reaching the $100K milestone in early December. The rally was driven by the launch of Bitcoin Spot Exchange Traded Funds (ETFs) in January and the reduced supply following the fourth halving event in April.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.