Ethereum could soon reach $ 2.000

Ethereum could soon reach the value of 2.000 $ - ethereum 2000 dollars 1024x683In the early hours of February 15, the price of Ether (quotation ETH) plunged to $ 1.660, followed by a 9% recovery over the next 10 hours. This resulted in the liquidation of over $ 280 million in futures contracts, indicating excessive leverage on the part of Long positions.

Although the initial anxiety about CME's ETH futures launch on February 8 appears to have subsided, the excessive transaction fees incurred may have undermined investor confidence. However, the fundamentals behind Ethereum remain solid, indicating that the price of ETH should recover promptly from any drops.

Are the commissions too high?

However, not all users can afford a $ 12 fee. A simple token exchange on decentralized exchanges can cost hundreds of dollars in gas commissions, leaving no other choice for small traders who can only leave the network.

Some are testing sharding and level two solutions to get around this problem, including Skale and Optimistic Network. Eth2 will use sharding to divide the blockchain into multiple parts and increase the number of transactions the network can process simultaneously.

The total locked value remains in an uptrend

However, the phenomenal growth in total frozen value (TVL) in decentralized finance projects cannot be ignored. The 34% increase over the past 30 days is in line with ETH's 38% gain in February. Regardless of the transaction fees.

To better understand whether the recent slump reflects a potential higher and subsequent downtrend movement, more data is needed. In addition to price action and technical analysis, investors should also evaluate on-chain metrics such as network usage. A great place to start is the analysis of transactions and transfer value.

Data from Coin Metrics shows that 14-day average transactions and transfers exceeded $ 9 billion in daily transactions, up 32% from the previous month. This significant increase in the transaction and transfer value signals its strength and suggests that the price of Ether is sustainable at current levels.

Currency withdrawals indicate long-term holding

While there is no consensus among analysts on the short-term impact on exchange withdrawal prices, its effect is neutral or bullish. The opposite movement, large continuous inflows, is the only bearish scenario, as it indicates the willingness of holders to sell.

From January 1st to February 15th, around 600.000 ETH were withdrawn from the exchanges. Regardless of whether whales move to cold wallets or put Ether into the DeFi ecosystem, those coins are less likely to sell short-term.

Considering this movement took place as Ethereum hit an all-time high of $ 1.870, the indicator still shows holder confidence.

To conclude, based on both on-chain metrics and the trading perspective, there are encouraging signs that $ 2.000 is within reach and dips are being bought aggressively.