On Saturday, net deposits to cryptocurrency exchanges surged to 140,660 ETH, indicating potential selling pressure and growing fear, uncertainty, and doubt (FUD) in the market. Despite Ethereum's (ETH) price hovering around the $3,900 mark, these significant deposits suggest a possible price drop in the near future.
Ethereum Exchange Inflows Surge
Data from IntoTheBlock reveals that the amount of Ether flowing into exchanges has reached its highest level since January 2024. This surge, marked by the largest net inflows in over four months, typically signals selling behavior. Investors might be either taking profits or reacting to market FUD.
Amid the recent price surge, some long-term Ethereum investors are cashing in their profits. On-chain data provider Lookonchain reported that a smart money investor recently sold 3,025 ETH for 11.8 million DAI at $3,904 per ETH, securing a profit of approximately $1.11 million. This investor, who accumulated 17,770 ETH between 2017 and 2020 at an average price of $182 per ETH, previously sold their holdings at $3,503 on March 28, 2024, resulting in a significant profit of around $59 million.
ETH/BTC Chart Shows Potential for Bullish Turn
Although Ethereum's price is nearing the $4,000 mark, it still needs to breach this level to confirm bullish momentum. Analyst Tuur Demeester suggests that market euphoria for Ethereum has not yet emerged. In a May 25 post on X, Demeester highlighted a crucial chart indicating that the ETH/BTC pair needs to breach 0.06 to turn bullish.
At the time of publication, the ETH/BTC pair was trading at 0.056, with the 50-week simple moving average (SMA) providing immediate support. For the pair to flip the long-term descending trendline (blue) into support, the price needs to hold this level. If successful, ETH/BTC is expected to rise and confront resistance at the 0.06 level, marked by the 200-week SMA. However, breaching this level alone does not guarantee a sustained bullish trend. The pair will still need to flip the 100-week SMA at 0.063 to confirm the breakout.
In conclusion, while Ethereum's price shows potential for bullish momentum, significant exchange inflows and profit-taking behavior among long-term investors indicate that the market could face short-term selling pressure. Investors and traders should closely monitor these developments to navigate the potential price fluctuations.
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