At press time, Ethereum is holding steady, trading in a tight $400 range with limits of $2,300 on the lower end and $2,800 on the upper end. Even though investors are positive and expect prices to rise sharply in the coming sessions, uncertainty still prevails in the market.

Ethereum Finds Support at $2,300: Over 52 Million ETH Bought

The world’s second most valuable coin is bearish, down more than 50% from July highs and unable to break the local resistance at $3,500. Since investors closely monitor price action, one of the analysts selected an captivating phenomenon based on market data.

Referring to IntoTheBlock data from October 11, the analyst notes that investors purchased over 52 million ETH at a price of approximately $2,300. Given the amount of coins in traders’ hands at this price, this zone represents immediate support.

Therefore, if buyers have the upper hand and augment prices from this point, this level will anchor the uptrend. If sellers double down on price, as has happened over the last few trading months, the likelihood of ETH falling below the Q3 2024 lows increases.

Currently, the sentiment is bearish, as seen in the CoinMarketCap survey. Over 65% of ETH holders and traders to expect prices will struggle in the miniature term.

Therefore, the price reaction on local support will shape the short- and medium-term pattern. A surge pushing ETH above $2,800 will be crucial in driving demand, providing a much-needed tailwind for bullish traders.

USDT, USDC and Stablecoin Market Capitalization Falling: Is Purchasing Power Waning?

While optimism is high, other related market data points to weakness. Over the past few trading weeks, the market capitalization of stablecoins such as USDT and USDC has been sinking. As of October 10, the analyst notes is down $780 million from recent highs, pointing to a possible decline in purchasing power.

Typically, whenever USDC, USDT, and even DAI move to centralized exchanges, more and more users eagerly purchase crypto assets, including ETH and BTC. However, if there is an outflow of funds or the market capitalization drops, this may mean that more users will be cautious and monitor events closely before making a trade.

Typically, more coins, including stablecoins, end up on centralized exchanges when there are concerns about market prospects. Such inflows usually precede a market-wide correction.

For now, no ETH inflows to centralized exchanges have been indicated. However, what is happening is that more and more bet holders are placing bets. By mid-week, market data showed that over 34 million ETH remained locked, with holders earning 3.3% APY.

Feature image from DALLE, chart from TradingView