According to current market trends, ETH has been on a downward spiral in the past 24 hours. With its price dropping by nearly 3%, it’s now trading at $2,447.52 at the time of writing this article.
The sell-off is attributed to the movement of a large amount of Ethereum to crypto exchange Binance. This price drop comes during a period when there is a large ETH transfer of 90,000 ETH, which is roughly worth $226.
It rose to $20 million to Binance within 24 hours. Before the last deposit, a wallet presumed to be of the ARB Foundation deposited 60,000 ETH, the equivalent of $150. 33 million. These transactions have elicited concerns about large-scale selling by investors and traders.
This comes after Vitalik Buterin, Ethereum’s founder, also sold off some ETH a few days ago, as earlier reported.
A detailed investigation reveals a bearish trend characterized by an evident descending trendline from the recent highs. This trend line is a significant resistance level on the chart, as several attempts to break through it have been unsuccessful.
This pattern suggests that there is still much bearish pressure, and buyers have not built enough force to overcome this pattern. This is shown in the overall downward trend of the market, evidenced by the descending trendline, which indicates bearish market sentiment.
As long as this trendline is not violated with good volume, the price will remain under pressure to the downside. At the moment, the price is about $2470. The recent price action shows that this level is a minor support zone.
However, the bears have been repeatedly trying to break this support level with no considerable bounce. That indicates they are still in the driving seat. Ethereum is likely to trigger more sell-offs, pushing the price down if it cannot hold above these support levels.
On the other hand, if the price rebounds from these levels, buyers are present, which may lead to a reversal. The Relative Strength Index (RSI) is at 37.97, particularly suggesting that the indicator was nearly oversold.
Normally, when the RSI is below the 30 level, the asset is considered oversold. When it is above the 70 level, the asset is considered overbought. The RSI level is near the oversold level, which indicates that there is strong selling pressure.
However, it also suggests a possible recovery or at least a short-term consolidation if the selling pressure begins to subside. There might still be some more room for more losses before a strong rebound.
4-hour ETH/USDT Chart | Source: TradingView
The massive deposits have resulted in heightened market volatility. According to CoinMarketCap, with a market capitalization dropping by nearly 3% to $294.45 billion and a significant decrease in 24-hour trading volume, down 27.42% to $8.77 billion, traders are displaying caution, anticipating potential further dips in Ethereum’s value.
What’s Next for Ethereum
The large number of deposits has led to increased instability in the market. Currently, CoinMarketCap shows a decline in market capitalization of about 3%.
This means that the total market capitalization of the cryptocurrency market is $45 billion. Whereas, the 24-hour trading volume has reduced by 27.42% to $8.77 billion.
Traders are being cautious and are preparing for a possible further decline in Ethereum’s price. Nevertheless, considering the sales and current situation, analysts expect a supply shock for Ethereum. Notably, ETF inflows have slowed down, which in turn leads to price swings.
If the supply of a token declines due to massive purchases or when assets are shifted from exchanges to cold wallets, then the supply decrease can lead to a price increase.
