- Ethereum (ETH) is up 4% on Monday despite increased selling pressure across long-term and short-term holders in the past two days
- Whales holding between 100K to 1M ETH increased their holdings by 410K ETH in the past two days, signaling confidence in a potential uptrend resumption
- If ETH breaks below the $3,250 support level, it risks a decline toward the $3,000 psychological level
The price of Ethereum (ETH) has shown a 4% increase on Monday, despite the fact that there’s been a marked increase in selling pressure from both long-term and short-term holders over the past two days. If the large investors, known as whales, do not maintain their recent buy-the-dip attitude, Ethereum runs the risk of a decline below $3,000.
Whale Activity Amidst Increased Selling Pressure
It has been noted that the bearish sentiment surrounding Ethereum has surged after the cryptocurrency experienced double-digit losses last week. This sentiment is clearly evident in the Network Realized Profit/Loss metric, which indicates that most investors have been selling off their assets to realize profits and losses in the past 24 hours. Investors have realized over $340 million in profits and $30 million in losses.
On the flip side, despite the selling activity, the Ethereum exchange reserve has maintained a downtrend with investors withdrawing their assets. Most of these withdrawals have come from whales holding between 100K to 1M ETH. After two weeks of consistent selling activity, this class of whales increased their holdings by 410K ETH in the past two days, signifying confidence in a potential uptrend resumption after the holidays.
Ethereum’s Potential Decline
Ethereum has been hovering within the $3,250 support and $3,423 resistance levels over the past weekend, with prices seeming to stabilize due to the holiday season. However, if the price of Ethereum breaks the $3,250 support level, it could decline towards the $3,000 psychological level. This target is obtained by examining the height of a double top pattern that ETH posted within the first two weeks of December down to its neckline support level.
If the $3,000 support level is breached, it would validate a rounding top pattern that could send ETH toward the $2,000 psychological level. However, the $2,817 key support level could help cushion such a decline.
On the other hand, for an uptrend to resume, ETH needs to recover the $3,550 support level with a high volume move. The Relative Strength Index (RSI) and Stochastic Oscillator (Stoch) indicators are below their neutral levels, indicating that the market is currently tilted towards bearish momentum.
A Look at Ethereum and Blockchain
For those unfamiliar, Ethereum is a decentralized, open-source blockchain with smart contract functionality. Its native currency, Ether (ETH), is the second-largest cryptocurrency and number one altcoin by market capitalization. The Ethereum network is designed for building crypto solutions like decentralized finance (DeFi), GameFi, non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), etc.
Ethereum operates on a public, decentralized blockchain technology where developers can build and deploy applications that function without the need for a central authority. The network leverages the Solidity programming language and Ethereum virtual machine to help developers create and launch applications with smart contract functionality.
Conclusion
While Ethereum’s price is currently in a precarious position, the actions of the whales and the potential support levels provide some hope for the cryptocurrency. Remember, investing in cryptocurrencies involves a great deal of risk and it’s important to do your own thorough research before making any investment decisions.
