The Second Largest Cryptocurrency Hints Transition to the Upside

Ethereum holds despite the recent flash crash, the whole cryptocurrency market is gradually rebounding. There were rumors that the fall signaled the start of a downturn, but the sellers’ failure to maintain the supply levels indicates that the market is just undergoing a severe pullback.

In spite of the fact that the crypto market has been around for almost a decade, it still has a high level of volatility. And price movement of over three percent even on the larger market cap cryptos is no surprise in this industry.

While Bitcoin and Ethereum are steadily rising, a few cryptocurrencies are excelling and propelling the market. Both Bitcoin (BTC) and ETH token began to rise after finding support at significant demand levels. Despite the bulls’ lack of enthusiasm, prices have managed to break the past barrier and reach considerably higher levels.

Bitcoin’s price has been hanging around $48,000 after a period of significant consolidation between $45,000 and $47,400. Similarly, after breaking over its nearest barrier at $3,500, it is now aiming to trade at $3,600. Interestingly, both the coins are trading about ten percent below their recent major resistance.

Ethereum Transaction Fees Surge Amid Flash Crash

Senator Warren, an outspoken critic of the cryptocurrency industry, has expressed her concern about the Ethereum network’s hefty transaction fees. The issues were aired during a committee meeting on Tuesday with Gary Gensler, the Securities and Exchange Commission head, to discuss banking, housing, and urban affairs.

The senator expressed concern against high fees, claiming that the Ethereum network’s unpredictably high fees can be harmful to crypto traders who aren’t rich enough to absorb the transaction charges. Warren raged about the market’s volatility as it lost $400 billion in market capitalization in a matter of minutes.

She pointed out that the charge for token swaps surpassed $500 during the recent momentary fall in the crypto market. These figures would be particularly troublesome for smaller investors.

Ethereum Circulating Supply Continues to Plunge

Ethereum’s circulation supply is decreasing at an unpredicted rate. Since the launch of ETH 2.0 the year before, the total amount of ETH locked to date has reached 7.7 million, with over 46,800 distinct deposit contracts. As we speak, based on the Ethereum spot price, the frozen ETH is worth almost $28 billion.

The London hard fork, which occurred in the first week of the previous month, resulted in a substantial drop in supply. More than 303,000 ETH have been burned and removed from the circulating supply as of writing.  Additionally, trading platforms are reporting a substantial drop in the amount of ETH accessible, with 19.45 million Ether, a three-year low.

Ethereum Wins Against Traditional Markets

Both months August and September, have been highly volatile in the crypto and conventional markets thus far. Despite this, Ethereum crypto has outperformed the top three stock indexes in the United States. Moreover, Ether has outpaced Bitcoin, which has been drifting sideways for some time, with over ten percent increases in the last month.

With the greed kicking in the market, it certainly looks like investors are going risk-on with the crypto as well as the traditional markets. And ETH crypto currently being in high positive correlation with the same trend indicates the presence of higher bids in these markets.

NFTs Boom, OpenSea Suggests

In comparison to other use cases like Decentralized Finance (DeFi), identity management, and gaming, Vitalik Buterin, the co-founder of Ethereum, has admitted that NFTs are arguably the best performing domain-based on the recent trends.

In fact, OpenSea, the biggest NFT marketplace, has had over $3.4 billion in revenue generated from transactions, demonstrating that demand for NFTs is surging. As per the data released by Dune Analytics, since the start of this month, OpenSea has sold about $1.7 billion in products (NFTs).

Ethereum Price Action Update

Ethereum has been under the radar of large investors, and it clearly shows when considering the momentum of the market throughout its retracement and consolidation.

After the drop that came in towards the end of the first week of September, the market went into a sideways phase, as indicated in the below price chart of ETH. But, worth noting, support at $3,322 was left unbroken despite the strong push from the seller. On the same candle that brought the dip, the prices rose north instantly after reacting off the higher timeframe demand at $3,000.

Presently, the market is consolidating between the above-mentioned support area and the $3,600 resistance level. On the most recent attempt from the buyers, the prices have made an attempt to breach above the resistance. But the prices getting back into the range indicates that the buyers are not ready yet.

If the price finds support anywhere above the bottom of the range, it is highly likely for the ETH market to potentially head to the next resistance at $4000. But, no higher low in the market could bring the prices back to around $3,100 before buyers show up again.

Now you can get Ethereum and most of your other favorite cryptos from our list of popular and reliable cryptocurrency exchanges.