Despite several macro challenges, Ethereum (ETH) is showing continuous upward momentum and potential to reach the $2K mark. However, due to recent market trends, Ethereum is facing a strong rejection above the $1.9K mark, which caused ripples among long-term holders and traders. The $1.9K rejection was not entirely unexpected. The crypto market is on the move, with Bitcoin, the market leader, also experiencing similar price resistance.
Whales’ profit-taking sentiment creates selling pressure
A key element contributing to the selling pressure on Ethereum is the profit-taking sentiment among Ethereum whales.
A prominent Ethereum holder transferred a substantial amount of 23,080 ETH, equivalent to approximately $44 million after the cryptocurrency’s price escalation above $1,904. This move indicates that key stakeholders are starting to capitalize on their gains in light of Ethereum’s recent price hike.
The average price at which the whale retreated Ethereum hovers around $1,820. This figure is significantly lower than the most recent peak price, suggesting a prudent risk management strategy and a tendency to secure profits in times of price increases.
Additionally, when analyzing on-chain data, Ethereum’s withdrawal transaction metrics have dropped following ETH’s recent big red candle. The stat is currently at the 81K level, last seen in January.
Withdrawal transactions are the transfer of Ethereum from exchanges to personal wallets. High withdrawals suggest that investors are keeping ETH private, possibly anticipating a price hike. Low withdrawals imply more ETH being stored on exchanges, often indicating upcoming sales.
A decrease in Ethereum withdrawal transactions can therefore put downward pressure on the ETH price. This is because when large amounts of ETH are held on exchanges, it increases the supply of Ethereum available to trade. If demand does not match this increased supply, this could lead to a surplus of ETH in the market, which could subsequently cause the price to fall.
What’s next for the ETH price?
Ether has been in a bearish wedge pattern for several days. On May 25, despite the bears’ attempts to push the price down to the wedge support line, bulls bought the dip aggressively, evidenced by the long candlestick tail. At the time of writing, ETH price is trading at $1,892, up more than 2% in the last 24 hours.
However, the ETH price witnessed massive selling pressure today, causing the price to drop from a high of $1,927. Bulls are now trying to hold the price above the 20-day EMA at $1,842. If successful, ETH price could rise towards the $1,930 resistance line. This is a crucial level to watch as a break above it could trigger a rally towards $2,000.
However, if the price drops from current levels or drops below the 38.6% Fib channel, it indicates that bears are still dominant at higher levels. This could cause ETH price to remain in bearish territory for a few more days.