Ethereum price action can be on crossroads as Donald Trump’s inauguration approaches. The chart exhibits Ethereum’s market dominance trends alongside corresponding RSI indicators.
Ethereum Price to Rise?
Historically, as ETH dominance declines, reaching key levels like 14%, a rebound typically follows, suggesting a potential rally.
This pattern, captured through 2024 and into 2025, indicates a trough at around 12.10%, followed by an increase towards a target above 18%.
Concurrently, RSI shows positive divergence, signaling increasing momentum even as dominance levels initially fall. This divergence could be predicting a reversal in trend, aligning with Ethereum‘s growing influence in the cryptocurrency ecosystem.
Increased volume in Spot ETH ETFs by late 2024 further supports this sentiment, hinting at robust inflows and investor confidence.
As ETH dominance aims to breach the 14% mark, the potential for altcoin rallies becomes more pronounced, suggesting an opportune moment for strategic trades.
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This scenario outlines a pivotal period where traders might benefit from reallocating from Ethereum to other altcoins, capitalizing on the anticipated shifts in market dynamics.
The Ethereum chart shows a clear recovery from the previous lows, with price action indicating resilience as it approaches the $4,000 mark. Previously, Ethereum experienced a significant drop, reaching lows that tested market sentiment.
This downturn was followed by a robust recovery, suggesting strong buying interest near these levels. The pivotal $4,000 threshold is now in sight, marking a critical resistance level that, if breached, could signal further bullish momentum.
Such a breakout would confirm a shift in market dynamics, potentially setting the stage for sustained upward movement. This analysis aligns with the broader market sentiment that anticipates higher valuations, underpinned by solid buy-side pressure at lower prices.
Return of Staked Ethereum
Analyzing Ethereum’s Total Value Staked against its price, we observed a clear divergence between the growing staking amounts and price fluctuations. By January 2025, Ethereum had 34.2 million ETH staked, representing 28.44% of its circulating supply.
As this staking produced a daily return of 2.7k ETH, it added similarly to circulation, balancing the network’s issuance with its burn rate, pegged to a Gwei of 27 to maintain non-inflationary status.
The period post-2022 merge until March 2024 saw a net supply decrease of 500k ETH, which slightly reversed with a 470k increase thereafter.
These dynamics suggest that despite minimal inflation, Ethereum’s economic model, reinforced by its staking mechanism, could provide a stable foundation for price appreciation. It could potentially drive market price above significant thresholds as staking continues to lock substantial portions of its supply.
Impact of Trump’s Inauguration Approaching…
The observed decline in exchange volumes around the holiday period has now settled at average levels. This stabilization often precedes an increase in market activity, particularly noted as the U.S. gears up for President Trump’s inauguration on January 20th.
Traditionally, such political events can inject volatility into the markets as investors and traders anticipate policy changes. It might affect the economy and subsequently, investment climates.
For Ethereum, the dominance chart illustrates a potential divergence. Despite a falling price, the relative market strength or dominance of Ethereum remains stable or increases.
This divergence could indicate that Ethereum is gaining relative strength compared to other cryptocurrencies. It would possibly hint at a bullish scenario for Ethereum as fresh investments are expected post-inauguration.
This period may offer an advantageous point for entering positions in anticipation of increased market movement stimulated by new fiscal policies or political stability.
