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Ethereum continues to demonstrate volatility as it approaches a critical resistance level of $3.6k, prompting speculation about its next move.
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The cryptocurrency experienced a recent surge that has seen over 90% of investors currently sitting in profit, raising questions about potential sell-offs.
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According to market analysts, “The current technical indicators suggest a strong possibility of a breakout if support levels can hold.” – COINOTAG.
Ethereum is testing its $3.6k resistance, with over 90% of investors in profit; a breakout could signal a rise to $3.9k soon.
Ethereum faces correction amidst selling pressure
As Ethereum [ETH] recently reached the significant resistance of $3.6k following a price surge, pressure from profit-taking appears to intensify among investors. Currently trading at $3,577.87, the cryptocurrency’s recent move has raised concerns about correction. Data from IntoTheBlock indicates that more than 90% of ETH holders are “in money,” which typically leads to increased selling activity.
This uptick in selling pressure has been confirmed by insights from Santiment, which noted a rise in ETH’s supply across exchanges, suggesting that many investors may be cashing in on their profits. On the other hand, signs of bullish confidence remain as large holders, or whales, have been accumulating, indicative of ongoing trust in Ethereum’s long-term potential.
Source: Santiment
Will ETH’s downtrend continue?
Assessing market dynamics, it becomes crucial to determine whether the apparent confidence from whale activity can catalyze ETH’s price above the $3.6k threshold and toward a potential $3.9k target. Last week, Ethereum’s open interest saw a substantial increase, correlating with its price gains, suggesting that the recent downturn might only be temporary as ETH retests resistance.
Furthermore, the funding rate has remained elevated, indicating a bullish sentiment among traders who are prepared to incur higher costs to maintain long positions. This sentiment is crucial in assessing future price movements.
Source: Coinglass
Both the increase in open interest and the high funding rate signify a potential upward price trend, reinforcing the probability of a breakout above the $3.6k resistance. The daily chart analysis shows ETH consistently testing this resistance, with technical indicators such as the Moving Average (MA) Cross suggesting a bullish edge, as evidenced by the 9-day MA being positioned above the 21-day MA. Additionally, the On Balance Volume (OBV) metric remains robust, pointing to strong trading activity that favors upward price movements.
Indeed, an increase in OBV signifies that days with price gains are seeing greater volume than those with declines, further underlining a positive market sentiment. If Ethereum successfully breaches the $3.6k resistance, it will likely pave the way for a climb toward $3.9k. However, failure to break through could lead to a decline toward its near-term support around $3.3k.
Source: TradingView
Conclusion
In summation, Ethereum’s current market dynamics suggest that while selling pressure exists, underlying metrics indicate strong bullish sentiment. With the critical resistance level at $3.6k being tested, stakeholders will closely monitor its movement in the upcoming days. A sustained breakout could signal a significant move toward $3.9k, while failure to do so may lead to a retracement. focusing on technical indicators and large holder behavior will be key in forecasting Ethereum’s short-term trajectory.
