ENS Price Prediction: Ethereum (ETH) domain service supply plummets, long positions target $30

Ethereum Name Service (ENS) is a domain name system based on Ethereum (ETH), which rose over 8% as of Wednesday (July 16) when this article was published, with a double-digit rise in the past 24 hours, outperforming the overall rise of the Crypto Assets market. As Ethereum rebounds strongly and breaks through the $3,100 barrier, the rise of ENS is also gaining momentum as part of its ecosystem, indicating that demand in the Web3 space is rising.

Derivatives and on-chain data are sending bullish signals, with an increase in open contracts and a decrease in exchange supply, consistent with traders' expectations of a continued rise.

ENS open interest contracts rose nearly 50%

CoinGlass data shows that the open interest (OI) of ENS has risen by 48% in the past 24 hours, reaching 131.58 million USD. The increase in OI indicates a rise in capital inflow into the derivatives market, reflecting an increase in trader interest.

In the past 8 hours, the weighted financing rate for holding coins surged from 0.0028% to 0.0149%, reflecting an increase in bullish sentiment among traders. Bulls are paying the financing rate to offset the imbalance between futures and spot prices.

In the past 24 hours, short positions have significantly decreased by $599,400, while long positions have decreased by $119,270, indicating a bullish trend in active positions. The long-short ratio is 1.0121, further confirming the bullish imbalance trend. Generally, a ratio above 1 indicates that the number of active long positions exceeds the number of short positions.

Exchange ENS supply decreases to a historic low

Santiment data shows that the available supply of ENS on exchanges has decreased to 4.99 million tokens, the lowest level since November 14. According to supply and demand correlation, the decrease in ENS supply may stimulate an increase in demand, thereby prolonging bullish momentum.

(Source: Santiment)

ENS Price Analysis

FXStreet analyst Vishal Dixit stated that ENS closed with its fourth consecutive bullish candle on the daily chart on Wednesday, reclaiming the 26 dollar mark, reaching this level again after five months. Since July, this rebound has accumulated a rise of 41%, targeting the resistance level at 30.29 dollars, which was last tested on February 3.

If the closing price definitively breaks through that level, it could drive the upward trend towards $34.51 (the last test was on February 1), followed by this year's highest point of $38.57.

The upward trend of the 50-day Exponential Moving Average (EMA) is about to surpass the 100-day EMA, which is seen as a buy signal, as the short-term growth exceeds the medium-term trend.

The Smooth Divergence Moving Average Convergence Divergence (MACD) and its signal line are rising in the positive zone, indicating that a bullish trend is forming. The histogram bars show an upward trend above the zero line, indicating strengthening momentum.

The relative strength index (RSI) on the daily chart is 78, indicating that the market is in an overbought condition against a background of increasing buying pressure.

However, if ENS fails to maintain momentum, a bearish reversal may retest the closing price level of $24.88 on February 9.

(Source: Trading View)