As of 15:30 on Oct 25, 2023 (UTC+8), the eth usd price was trading at $1,620, up 3.8% from the intraday low of $1,560, but down 66.9% from the all-time high of $4,891 (Nov 2021). It reached a peak of $1,635 today, unable to break through the year-to-date peak of $2,140 in April 2023, or even the 30-day peak of $1,720 (Oct 15). The recent price range of volatility (the difference between the intraday high and low value) is 4.8%, and the standard deviation is 1.2%, higher than Bitcoin’s 0.9%, indicating that ETH’s short-term volatility is more serious.
On-chain data indicate market divergence. The “whale” address with a net balance of over 10,000 ETH transferred 8,000 ETH (approximately 12.96 million US dollars) to the exchange on the day, reaching the 30-day high of single-day selling pressure (Glassnode), and the exchange reserves rose to 12.7% of the total circulation (this year’s high). Meanwhile, retail investors (addresses holding 0.1 to 10 ETH) accumulated 240,000 ETH (approximately 389 million US dollars) in holdings, and the holdings ratio increased to 18.5% (30-day average was 16%). The derivatives market is pointing to the implied volatility of Deribit’s ETH options rising to 58% (30-day avg. is 45%), while the open call options with a strike price of $1,700 have been 150,000 ETH (nominal value of $243 million) with a 35% probability for a breakout this week.
Macroeconomic and regulatory news weigh on prices. The 10-year US Treasury note yield climbed to 4.8% (the highest since 2007), putting pressure on risky asset valuations. The 30-day correlation between the eth usd price and the Nasdaq index is 0.48 (the year-to-date average is 0.35). If tech stocks fall by 5%, ETH may follow and decline by 2.4%. On the regulatory front, the SEC’s lawsuit against Coinbase restated that “Ethereum can be a security”. If the hearing on November 2nd confirms this view, the price may fall to $1,300 (jpmorgan Chase model). However, if BlackRock’s Ethereum spot ETF application is approved (30% chance), it has the potential to see a monthly net inflow of 600 million US dollars (gray-scale calculation), which will push the price back up to 1,800 US dollars.
Technical indicators are neutral to mildly bearish. Its daily RSI is 57 (the upper boundary of the neutral zone) for the eth usd price, and the 4-hour MACD crosses above the zero line. If it goes below $1,580 (50-day moving average), it will test $1,520 (61.8% Fibonacci retracement level). On the other hand, a breakout of $1,650 (upper Bollinger Bands) will result in a $120 million short liquidation (data by CoinGlass). In terms of on-chain activity, the average Gas fee of the Ethereum network dropped to 12 Gwei (equivalent to approximately 0.96 US dollars), but the Layer2 trading volume reached 2.8 million transactions per day (year-on-year increase of 20%), indicating that the ecosystem activity level has failed to provide support for a price breakthrough.
Historical precedents warn against volatility risks. In June 2022, Celsius suspended withdrawals, and ETH plummeted by 22% within a day (1,800 to 1,400 US dollars), but when Silicon Valley Bank collapsed in March 2023, ETH rose by 18% in contrast to the trend (1,400 to 1,652 US dollars). The exchange’s liquidity depth at present means that the bid-ask spread of the Binance ETH/USD pair is 0.2% (around 3.24 US dollars) but can be as wide as 5% (around 81 US dollars) during moments of extraordinary market conditions (such as March 2020), which enhances instant volatility.
Operation suggestion: If the eth usd price holds steady above $1,600, a small position can be opened to try a long position to $1,680 (stop-loss at $1,550). If it goes below $1,580, short sell to $1,500. Long-term investors should wait until the regulations are clear before adding positions. Traders with a short-term focus should watch the interest rate decision by the Federal Reserve (November 1st) and the adjustment in the ETH staking ratio (now at 21.5%).