Ethereum (ETH) is currently under downward pressure and risks a price drop below the $3,000 level. In addition to the general stagnation in the cryptocurrency market, ETH’s decline is due to the decrease in activity from large investors. This points to some important analysis regarding Ethereum’s price action and the critical levels that investors should pay attention to.
Ethereum Faces Selling Pressure as Whale Net Flows Drop
According to IntoTheBlock data, the net flow of large holders of Ethereum has decreased by 73.19% over the past seven days. Whale addresses are large investors who hold more than 0.1% of the circulating supply. This decrease in net flow suggests that whales have begun to sell or transfer their Ethereum holdings, creating insecurity about Ethereum’s near-term price prospects. This move could lead to further downward price pressure as large investors move their funds elsewhere.
Taker-Buy-Sell Ratio Shows Decline
Ethereum’s Taker-Buy-Sell ratio has also remained below 1 for the past seven days, indicating increasing selling pressure among derivatives traders. According to CryptoQuant, the ratio currently stands at 0.94. The Taker-Buy-Sell ratio measures the ratio of buy orders to sell orders executed by market buyers, and a ratio below 1 indicates that sell orders are outnumbering buy orders. This suggests that more traders are closing out their positions by selling, potentially indicating a drop in Ethereum’s price.
MACD Indicator Confirms the Fall
On Ethereum’s daily chart, the Moving Average Convergence Divergence (MACD) indicator confirms the downtrend in demand. ETH’s MACD line (blue) continues to remain below the signal line (orange) and the zero line. MACD is an indicator that helps determine the strength, direction, and duration of a trend, and in Ethereum’s case, this indicates that the downtrend is continuing. If the selling pressure continues, the price of ETH could drop below the $3,070 level and drop to $2,558.
Whale Activity and Market Sentiment Could Drive Price Higher
However, if market sentiment improves and Ethereum whales start accumulating again, the price of ETH could rise to $3,415. This is possible as market participants show increasing confidence in Ethereum.