Ethereum has revived a long-lost faith in its investors following its recent impressive price action, which saw the altcoin reclaim the $3,000 level. While the ETH token is still a fair distance from its all-time-high price, the “king of altcoins” has started to reclaim its somewhat lost reputation in the crypto market.
While the Ethereum price has somewhat slowed this weekend, the second-largest cryptocurrency has managed to hang around the $3,600 level. However, the latest on-chain data has cast doubt on the capacity of the ETH token to continue its bullish rally in the coming days.
Ethereum’s Binance Reserve Hits New High
In a Quicktake post on the CryptoQuant platform, CryptoOnchain revealed that Ethereum recently hit its highest reserve level on the world’s largest cryptocurrency exchange by trading volume, Binance.
This on-chain observation was based on the Exchange Reserve metric, which measures the total amount of Ether tokens being held in wallets on a crypto exchange (Binance, in this case) at a given time. It also gives an insight into the netflow into these Binance wallets.
When inflows overshadow the outflows, the Binance Ethereum reserve increases, meaning there is more ETH token on the exchange. On the other hand, more outflows compared to the inflows means the exchange reserve decreases.
According to the analyst, the last time the Binance Ethereum reserves hit a new high was in November 2022. This latest occurrence indicates increased strength in exchange activity over the past weeks.
CryptoOnchain further explained that while this increased activity might mean potential selling pressure for the cryptocurrency, the context suggests that the opposite is the case. With the Ethereum price experiencing its bullish rally, this growth in market participation could be a result of renewed bullish sentiment.
ETH Dominance Regains Lost Ground
CryptoOnchain also reported that Ethereum’s dominance is reaching levels it had previously lost in its periods of poor performance.
The relevant on-chain indicator here is the Market Cap ETH Dominance, which measures the percentage of Ethereum’s market capitalization compared to other cryptocurrencies’ market capitalization. This indicates Ethereum’s share in the overall crypto market, and is usually represented in a Renko chart.
The Renko chart shared by the analyst reflects a “strong bounce” from the critical 8% support zone, as it heads towards 11.2%.
The online pundit further explained that with a notable divergence seen on the Moving Average Convergence Divergence (MACD), this strength could mean growing Ethereum leadership as Bitcoin’s momentum cools. CryptoOnchain, however, expects this growing dominance to face resistance around the 14% level.
If Ethereum’s dominance holds, and its price manages to stay above $3,500, there might be further upside movement. The analyst, however, preached caution in market involvement as Ethereum approaches the aforementioned resistance, which might cause possible short-term corrections.
As of this writing, Ethereum is valued at about $3,655, reflecting a 1.5% increase in the past 24 hours.
