Ethereum has experienced a significant surge in price over the past week, with a gain of over 22% to reach a high near $3,856. However, a recent 24-hour dip of 4.18% has sparked concerns about short-term momentum. Despite uncertainties surrounding regulations and ETF outflows, Ethereum’s fundamentals and onchain data suggest that this dip could be a healthy cooldown rather than a reversal of the trend. Let’s take a closer look at ETH’s next potential milestones in this short-term price analysis.
Strategic Holding Amid Sell Pressure
Glassnode’s Cost Basis Distribution Heatmap indicates that a large group of ETH investors who accumulated around the $2,520 level have started to realize profits. This is evident from the diminishing red bands since early July. However, nearly 2 million ETH from this group remains dormant. This data reveals three crucial insights:
1. Holders are taking partial profits rather than exiting entirely.
2. The remaining position indicates a continued belief in further upside.
3. New buyers are absorbing the selling pressure, indicating increasing demand.
This distribution behavior highlights a mature investor base that is using rallies to rebalance their portfolios while maintaining confidence in Ethereum’s medium-term prospects.
Ethereum Price Analysis
At the time of writing, Ethereum is trading at $3,635, with a 4.18% decline in the last 24 hours. The RSI has dropped from the overbought territory of 70 to 51, signaling a decrease in momentum. Additionally, the price has broken below the 20-period EMA on the 4-hour chart, indicating short-term bearish pressure.
Key support levels are identified at $3,550, which could potentially act as a bounce zone. A failure to hold this level may expose ETH to further downside towards $3,525. On the upside, Ethereum needs to reclaim the resistance at $3,870 to have any chance of retesting the $4,096 level.
FAQs
Why is Ethereum price down today?
The decline in Ethereum’s price today can be attributed to Bitcoin ETF outflows, profit-taking following a sharp rally in ETH, and uncertainties surrounding regulations.
Is Ethereum still bullish in the medium term?
Yes, onchain data suggests that large holders are maintaining their positions, indicating confidence in long-term upside potential despite short-term corrections.
Where is the ETH price heading next?
While support levels for Ethereum are at $3,550 and $3,525, resistance is at $3,870, and the crucial breakout level is at $4,096.
In conclusion, while Ethereum may be experiencing a short-term cooldown in price, the overall outlook remains positive based on onchain data and investor behavior. Keep an eye on key support and resistance levels to gauge the next potential moves in ETH’s price action.