As numerous on-chain measures indicate that purchasing pressure is increasing, Bitcoin and Ethereum look destined for significant volatility.
Still, these cryptocurrencies must clear one hurdle before they can resume their upward path.
Bitcoin has made a remarkable comeback after falling below $41,000 earlier today. Following the sharp decline, the top cryptocurrency was able to gain almost 3,500 points, reaching a high of $43,750 at the time of writing.
As prices fell, Santiment’s Token Age Consumed index recorded a significant increase in idle BTC now exchanging hands in the last few hours.
This on-chain metric counts the number of coins that have recently switched addresses multiplied by the number of days since the previous time they moved.
Based on recent token fluctuations, Bitcoin may face further volatility if history repeats itself.
The behavior of whales implies that the upcoming surge in volatility may be on the upside. Wallets on the network with 100 to 10,000 BTC have added more than 80,000 BTC to their holdings in the previous 24 hours, totaling $3.32 billion.
The amount of Ethereum tokens owned on cryptocurrency exchanges is steadily dropping.
More than 1.35 million ETH have been drained from trading platforms in the previous month alone, indicating a 6.63 percent decrease.
The decreasing ETH supply on well-known cryptocurrency exchange wallets bodes well for Ethereum’s future price rise.
It technically decreases the amount of ETH available for sale, therefore limiting the negative potential.
More than 1.2 million addresses have received about 8.6 million ETH worth $3,185 to $3,275. A decisive candlestick close over this resistance level may catapult ETH to $4,000 or new all-time highs.
Nonetheless, investors should keep a careful eye on the $2,900 support level, as any hints of weakness in the area might prompt market players to sell. Ethereum may plummet below $2,500 in such unusual situations.