Despite several macro challenges, Ethereum (ETH) has shown continued upward momentum and potential to hit the $2,000 mark. However, recent market trends have seen Ethereum facing a strong rejection above the $1.9000 mark, causing ripples among long-term holders and traders. The rejection at $1.9,000 was not entirely unexpected. The crypto market is in flux, with Bitcoin, the market leader, also experiencing similar price resistance.
Whale profit sentiment causes selling pressure
An important element contributing to the selling pressure on Ethereum is the profit sentiment among Ethereum whales.
A major Ethereum holder transferred a substantial sum of 23,080 ETH, or around $44 million following the cryptocurrency’s price escalation above $1,904. The move signals that significant stakeholders are beginning to capitalize on their gains in light of Ethereum’s recent price surge.
The average price at which the whale withdrew Ethereum hovers around $1,820. This figure is considerably lower than the last price peak, implying a cautious risk management strategy and a tendency to secure profits during times of price appreciation.
Additionally, analyzing the on-chain data, Ethereum’s pullback transaction metric has declined following the recent big red candle in ETH. The metric is currently at the 81K level which was last seen in January.
Withdrawal transactions are the transfer of Ethereum from exchanges to personal wallets. High withdrawals suggest that investors are holding ETH privately, perhaps anticipating a price rally. Low drawdowns imply that more ETH is stored on exchanges, often indicating upcoming sell-offs.
A drop in Ethereum withdrawal transactions can therefore put downward pressure on the price of ETH. This is because when large amounts of ETH are kept on exchanges, it increases the supply of Ethereum available for trading. If demand does not match this increased supply, it may result in a surplus of ETH in the market, which may cause the price to fall further.
What’s next for ETH price?
Ether has been declining for several days. On May 25, despite the bears’ efforts to lower the price to the wedge support line, the bulls aggressively bought the dip, as evidenced by the long tail of the candlestick. At the time of writing, the price of ETH is trading at $1,892, gaining more than 2% in the past 24 hours.
However, ETH price saw massive selling pressure today, dropping its price from a high of $1,927. The bulls are now trying to hold the price above the 20-day EMA at $1,842. If successful, the price of ETH may climb to the resistance line at $1,930. This is a crucial level to watch as a break above could trigger a rally to $2,000.
However, if the price drops from the current level or breaks below the 38.6% Fib channel, it will indicate that the bears are still dominating at higher levels. This could cause ETH price to remain in a bearish region for a few more days.