Will Surging DeFi TVL Pump ETH To $3,000?

Ethereum price prediction: The crypto market rallied significantly last week amid growing anticipation of the Securities and Exchange Commission (SEC) approving Bitcoin spot exchange-traded funds (ETFs) in the US. However, the week culminated in widespread declines led by Bitcoin (BTC) and Ethereum (ETH).

The two most prominent cryptos continued with their retreat on Monday with Ethereum price falling by 6% to $2,215 and Bitcoin price sliding by 5% to $41,796.

Cumulatively, the market cap is down to $1.63 trillion. Ethereum accounts for 16.3% of the crypto market while Bitcoin dominance holds at 50.1%.

Ethereum Price Prediction: Will Holders Buy The Dip?

Ethereum is in danger of falling below the current support at $2,200, especially if the sell-off across the market continues throughout the US session. There’s a chance the 21 Exponential Moving Average (EMA) (blue) will reduce the intensity of the downtrend and trigger a buy-the-dip spree.

However, this outlook may fail to materialize based on the Moving Average Convergence Divergence (MACD) indicator and the potential sell signal.

Traders considering shorting ETH price may want to confirm that the blue MACD line is below the red signal line and the indicator is generally sloping downwards.

The next key support lies at $2,100 but if the selling pressure overwhelms the bulls, traders would be forced to push the nearest support area to $2,000. Trading below this level could cause panic selling as holders rush to protect the gains they have accumulated over the last two months.

Investors are likely to be sitting on the edge and preparing to buy the dip if Ethereum price upholds support either at $2,100 or $2,000.

Ethereum is approaching oversold levels in shorter time frames, as shown by the Relative Strength Index (RSI) applied to the four-hour chart. Two scenarios may play out based on the RSI’s position and available support areas.

If support at $2,200 holds and Ethereum price begins to rise, the RSI will also start moving up in the neutral area, suggesting the brief correction is over and a recovery is due.

On the other hand, if the RSI continues with the downward trend into the oversold region, Ethereum price will be forced to lose more ground and possibly touch $2,000 before rebounding.

Recommended for you: Reasons Why Terra Classic Price (LUNC) Could Explode 38% This Week

Ethereum DeFi TVL Rally To $28 Billion

The total value locked (TVL), which measures the amount of Ethereum locked across the Ethereum decentralized finance (DeFi) has increased to $28 billion from $26.7 billion on December 1, according to data by Defi Llama.

An increasing TVL suggests that holders have a long-term bullish outlook for Ethereum and are not bothered by short-term price movements. It also reduces the circulating supply, which subsequently lowers the potential selling pressure, thus setting up Ethereum price for a rally.

Related Articles