Ethereum Set for April Surge as Whales Accumulate, Market Supply Dwindles

In March 2024, Ethereum saw a modest 11.8% growth, closing at $3,646.8. Despite initial positive momentum, the Dencun Upgrade on March 13 led to a sell-off. However, recent trends reveal a bullish shift among ETH whale investors, who have accumulated 860,000 ETH worth approximately $3.1 billion since March 20. This shift, coupled with declining exchange supply, suggests a positive start to April for Ethereum, with a potential resistance level at $3,700 and a support level at $3,200.

Ethereum Price Poised for April Surge as Whales Resume Accumulation and Market Supply Dwindles

Ethereum (ETH) concluded March 2024 on a positive note, closing at $3,646.8, marking an 11.8% monthly gain. While the Dencun Upgrade initially triggered a sell-off, recent whale buying trends and on-chain metrics suggest a bullish trajectory for the month of April.

Whale Accumulation Resumes Post-Upgrade Sell-Off

In the aftermath of the Dencun Upgrade on March 13, Ethereum faced a 13% dip as swing traders and large stakeholders offloaded holdings to mitigate potential network disruptions. However, the past two weeks have witnessed a reversal in sentiment, with whales accumulating 860,000 ETH worth approximately $3.1 billion.

This sustained buying spree by top holders is significant for several reasons. Firstly, whales exert considerable influence on price action and investor behavior. Their recent acquisition signals market recovery and potentially attracts new entrants. Secondly, whale investors typically adopt a long-term investment horizon, suggesting that a substantial portion of the $3.1 billion purchase will remain off the market supply in the near term.

Declining Exchange Supply Bolsters Bullish Outlook

Complementing the whale accumulation trend, on-chain data reveals a persistent decline in ETH coins available for trading on exchanges. Since whale wallets resumed buying on March 20, crypto exchanges have experienced a 363,000 ETH drop in active market supply, equating to over $1.3 billion in liquidity being pulled from spot markets.

This reduced supply, albeit temporary, places Ethereum price in a prime position for an accelerated breakout during the next demand surge in April 2024, as per the principles of demand economics.

Resistance at $3,700, Breakout Above $4,000 Expected

Based on these on-chain observations, Ethereum price is poised to surpass $4,000 in April 2024. However, bulls face a significant resistance level at $3,700, where 9.8 million addresses holding 4.7 million ETH will break even. If a majority of these holders exit at this level, ETH's rally could face downward pressure.

Nevertheless, the combined impact of whale accumulation and declining market supply suggests that ETH price will likely overcome this sell wall and reach new heights above $4,000.

Bearish Scenario: Break Below $3,200

On the downside, if the broader crypto market rally stalls, Ethereum bears could regain control if ETH price dips below $3,200. However, this scenario appears unlikely given the current market dynamics. Additionally, the 9.1 million addresses that acquired 7.7 million ETH at an average price of $3,484 could step in to prevent a significant decline below $3,500.

Conclusion

Ethereum's recent whale accumulation, coupled with declining exchange supply, paints a bullish picture for April 2024. While a resistance level at $3,700 could pose a challenge, the fundamental factors supporting ETH's price trajectory suggest a breakout above $4,000 remains highly probable.