The recent surge in the crypto market, fueled by Bitcoin’s new all-time high, has led to a temporary peak as profit-taking sentiments take hold. Ethereum, in particular, has struggled to maintain its recent high as larger investors begin to withdraw their funds. This could signal a short-term correction for ETH price in the near future.
Ethereum has been grappling with meeting buying demand as short-term investors take profits and sell off their positions. Data from Coinglass shows that over $40.66 million in Ethereum positions were liquidated in the past 24 hours, with a significant portion coming from sellers. Additionally, large transaction volume has seen a sharp decline, indicating that big investors are stepping back and weakening the upward momentum in ETH’s price.
Despite these challenges, Ethereum’s DeFi activity continues to grow, with the total value locked in Ethereum rising to $62.7 billion by May 26. Platforms like Pendle, Ether.fi, and EigenLayer have seen significant increases in deposits, fueling optimism for a rebound in ETH price.
Looking ahead, ETH price faces resistance around $2,731, with a drop below immediate Fib levels. As bears strengthen their hold, buyers are struggling to trigger a recovery rally. Currently trading at $2,535, ETH price may fall to the 100-day EMA around $2,456, a crucial support level to monitor. A bounce back from this point could lead to another attempt to break past $2,750 and potentially reach $3,000. However, a drop below the 100-day EMA could signal a bearish correction, with the pair potentially falling towards the descending trend line at $2,329.
In conclusion, while Ethereum may face short-term challenges in meeting buying demand and price resistance, the growth in DeFi activity and overall market conditions suggest potential opportunities for a rebound in ETH price. Investors should closely monitor key support and resistance levels to navigate the current market conditions effectively.