Is Ethereum (ETH) going to drop? Next stop $3500?
Ethereum (ETH), the second largest cryptocurrency in the world, seems to be on the verge of a drop after the recent bear market. It's not just the price; whales and experts also seem less enthusiastic about it, according to on-chain analysis firms IntoTheBlock and CryptoQuant.
Is ETH going to drop?
Recently, the price of ETH surged by 15%, even reaching $4100 for the first time. But the good times didn’t last long, as selling pressure quickly set in and the price began to fall. History has a striking resemblance; every time ETH has reached this price level in the past five instances, it has always dropped back down amidst significant selling pressure.
ETH exchange reserves have increased
According to previous trends, whales and long-term holders have started to deposit ETH into exchanges again. Data from CryptoQuant shows that exchange reserves have increased by nearly 100,000 ETH, worth $400 million. This means that as the price rises, the selling pressure follows.
Whales start to unstake
Not only have exchange reserves increased, but whales have also begun to withdraw coins from staking. This indicates they might have made enough profit and want to cash out or are simply losing confidence in holding ETH long-term. Justin Sun, the founder of Tron, is a prime example; he recently withdrew 52,905 ETH from the Lido Finance staking protocol, valued at $209 million.
Technically bearish
Experts' technical analysis also shows that ETH has formed a bearish double-top pattern at the $4100 price level. Additionally, the Relative Strength Index (RSI) is declining, indicating a bearish divergence, meaning the price is likely to drop further, and selling pressure will increase.
Potential drop to $3500
Based on recent price trends, ETH could potentially drop by 12%, directly falling to $3500.
Current situation
At the time of writing this article, the ETH price is hovering around $3970, having dropped 0.8% in the past 24 hours. However, trading volume has increased by 60%, indicating that crypto enthusiasts are still quite active.
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