Cryptocurrency market experiences halt as significant investors unload $530 million worth of Ethereum; question arises whether it can reach $4,000.
Ethereum's priceencountered a roadblock this week following a significant resistance level, with on-chain data indicating whale sales and decreasing social engagement.
On May 28, Ethereum, currently trading at $2,650, lingered slightly beneath the crucial threshold of $2,722. The digital currency remains 91% above its lowest point for the year.
According to Santiment data, whales have started offloading their holdings, shedding approximately 200,000 coins, equivalent to $530 million. Their current holdings now stand at 103.52 million coins, down from 103.74 million on May 24.
Ethereum's social volume also saw a significant drop to 476, a stark contrast to this month's high of 3,060. The decline in social volume suggests that conversations surrounding ETH on leading platforms such as Telegram and X have diminished. Generally, cryptocurrency prices tend to rise when there is strong social media activity surrounding them.
Ethereum's network faces challenges, particularly in the realm of layer-2 networks. Data from growthpie indicates that network activity declined significantly, with only 415,000 active addresses on Tuesday. This figure pales in comparison to Base's 1.93 million and Celo's 486,000.
However, there are signs that U.S. investors are showing renewed interest in Ethereum ETFs. These funds have witnessed positive inflows for three consecutive weeks, amassing $38 million this week. The accumulated inflows now stand at $2.8 billion, bringing the total assets under management to $9.60 billion.
Technical analysis reveals that Ethereum's price has struggled to surpass the resistance at $2,722, which also corresponds to the 50% Fibonacci retracement point. Ethereum has formed a bullish flag-like pattern, characterized by an upwards spike followed by consolidation. Furthermore, the spread between the 50-day and 200-day moving averages continues to narrow, hinting at a potential golden cross pattern. A break above the 50% retracement would point towards further growth, with the next major resistance at $3,000. A fall below the support at $2,333 would negate the bullish outlook.
Meanwhile, Toncoin saw a 6% increase as BlackRock reportedly expressed interest in Telegram's $1.5 billion bond offering.
- The recent drop in Ethereum's social volume could negatively impact its price, given that increased social media activity often correlates with a rise in cryptocurrency prices.
- Despite the roadblock faced by Ethereum's price, U.S. investors are demonstrating renewed interest in Ethereum ETFs, with these funds recording positive inflows for three consecutive weeks.
- The decline in Ethereum's network activity, particularly on layer-2 networks, could be a concern for investors, with only 415,000 active addresses on Tuesday compared to competitors like Base and Celo.
- Technical analysts are expecting a potential golden cross pattern for Ethereum if the spread between the 50-day and 200-day moving averages continues to narrow, suggesting a possible break above the resistance at $2,722 and further growth towards $3,000.
