The recent underperformance of Ethereum (ETH) in the past quarter has led to a surge in speculation about the asset’s potential in the current bull run. Crypto investors are torn between offloading their ETH to prevent further losses or accumulating more in anticipation of potential future profits.
Ali Martinez, an on-chain analyst, has given some valuable insights into Ethereum’s price trajectory. He examined several metrics that could indicate a bullish or bearish future for the second largest cryptocurrency.
According to Martinez’s evaluation, the 57% drop in Ether’s value from $4,100 to $1,750 between December and mid-March has pushed investor sentiment into a state of fear. This led to substantial selling activity, even among large investors, as evident from the decrease in the number of addresses holding over 10,000 ETH from 999 to 919 between mid-February and early March.
Transaction activities by Ethereum whales further amplified the sell-off with about 130,000 ETH exiting wallets of these sizable investors in the week ending March 17. Additionally, US spot Ethereum exchange-traded funds (ETFs) have also witnessed outflows amounting to $760 million in the last month. Traders also transferred over 100,000 ETH to crypto exchanges between March 11 and 13, adding to the selling pressure.
From a technical standpoint, Ether’s three-day chart indicates an ascending triangle, hinting at a potential drop to $1,000. A break in the daily chart’s parallel channel suggests the cryptocurrency could fall to $1,250. Furthermore, ETH pricing bands have marked $1,440 as a crucial downside target. However, the coin could experience a rebound if it maintains this support level.
Martinez has earmarked $1,887 as the pivotal support level for ETH, where investors have accumulated 1.63 million ETH. If ETH cannot sustain the $1,887 support level, it is likely to fall to lower targets at $1,440, $1,250, and potentially even $1,000. It’s worth noting that there is significant resistance at $2,250 and $2,610; Martinez indicates that ETH breaching this area would negate the bearish outlook.
Martinez emphasized that the high selling activity and technical indicators suggest further downside risk for ETH. However, recent data shows that ETH whales accumulated 470,000 ETH last week, while traders have withdrawn 1.20 million ETH from exchanges in the last 48 days.
With a substantial amount of ETH leaving exchanges and whales accumulating the asset, it could put upward pressure on Ethereum’s price. ETH has already increased nearly 10% over the past week, trading above $2,090 at the time of writing.
