Ethereum (ETH), recognized as the world’s second-largest cryptocurrency in terms of market capitalization, is currently demonstrating signs of a possible downward trend in its pricing. This development comes on the heels of recent bearish market movements. Notably, major cryptocurrency holders, commonly referred to as whales, alongside industry analysts, appear to be shifting their focus away from this prominent altcoin. Insights from on-chain analytics firms such as IntoTheBlock and CryptoQuant lend credence to this observation.
Will ETH Price Decline?
In recent weeks, Ethereum has witnessed a significant price increase, surpassing 15% and reaching the $4,100 threshold for the first time since March 2024. However, upon reaching this milestone, the cryptocurrency encountered substantial selling pressure, resulting in a notable price reduction. Historically, Ethereum has achieved this level on five separate occasions, each time facing similar outcomes of price depreciation and intensified selling activities.
Ethereum (ETH) Rising Exchange Reserve
Examining past market trends, it becomes apparent that whales and long-term investors are progressively channeling their Ethereum holdings to exchanges. This behavior is highlighted by CryptoQuant’s metrics on Ethereum exchange reserves. Data indicates that these reserves have surged by nearly 100,000 ETH, equating to approximately $400 million. This could potentially herald increased selling pressures as the cryptocurrency’s price edges closer to a six-month peak.
Rising Unstaking Activity
Besides the increase in exchange reserves, there is a noticeable rise in unstaking activities by whales, suggesting a strategic withdrawal of profits following the recent price upsurge or a dwindling interest in long-term Ethereum investments. A case in point is the activity of Justin Sun, the founder of Tron. On December 16, 2024, the whale transaction tracker Spotonchain posted on X (formerly known as Twitter) about Sun’s wallet, which requested the withdrawal of 52,905 ETH, valued at $209 million, from the staking protocol Lido Finance.
Ethereum (ETH) Technical Analysis and Key Levels
Technical analysts have identified a potential bearish double-top pattern forming at Ethereum’s robust resistance level of $4,100. Alongside this pattern, Ethereum’s Relative Strength Index (RSI) is exhibiting a downward trajectory, indicative of a bearish divergence. This trend suggests a looming price reduction and an escalation in selling pressure.
Current evaluations based on recent market behavior indicate a strong likelihood of Ethereum experiencing a 12% decline, potentially dropping to the $3,500 mark in the near future.
Current Price Decline
As of the latest data, Ethereum is trading close to the $3,970 mark, having observed a modest price reduction of 0.80% over the past 24 hours. During this timeframe, its trading volume has surged by 60%, reflecting increased participation from cryptocurrency enthusiasts amid the recent price hike.
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