Ethereum has emerged from a prolonged period of consolidation, breaking out above a critical resistance level and fueling bullish sentiment among analysts. On-chain flows, however, appear to indicate that investors may be considering selling.
Investors in Ethereum transfer ETH to exchanges.
Data from Spot On-chain shows that on December 5, 7,500 ETH, or around $16.7 million ETH, were transmitted to exchanges by the bankrupt cryptocurrency lending and borrowing company Celsius. From November 14, 2023, a staggering 37,269 ETH have been sent to centralized entities, according to a review of Celsiu’s wallet history. The $19.47 million deposit made on November 30 is the largest influx, with the most recent transfer coming in second.
Moreover, it has been reported that a well-known cryptocurrency investor going by the screen name “smartestmoney.eth” has started to sell their ETH. As of this writing, this entity had deposited $10.08 million worth of ETH to Binance, based on information from Lookonchain.
Investors should exercise caution as to what Bitcoin will do next, even though these two deposits are not significant enough to cause a sell-off due to the current surge. On December 4, the price of altcoins crashed 15%–30% due to a 2% decrease in BTC. Therefore, altcoins, including ETH, could suffer significant harm if the pioneer cryptocurrency’s downward trend continues.
The price of ETH is not rising in a triangle but rather in a wedge.
An ascending triangle has formed in the price action of Ethereum over the past few months, as many investors have noted. According to these analysts, ETH is set up for a future increase north and the latest move was a breakout. Although there is nothing wrong with this outlook, investors should examine Ether’s price behavior again.
Given the gradual increase in selling pressure and the slowing in the price of Bitcoin, a temporary reversal may be imminent. An alternative way to interpret the price behavior of Ethereum over the last few months could be to see it as a rising wedge rather than an ascending triangle.
The highest limit of this setup is currently being seen in the price of Ethereum, around $2,230. This is a difficult level to break because it is located at the midpoint of the range, which is $2,230. Therefore, it appears likely that this will be rejected, especially in light of the exchanges’ inflows. As a result, ETH may decline in the near term while maintaining its long-term bullishness.
Given the state of the market, a negative breakout of the rising wedge seems unlikely. Therefore, the weekly support level of $1,935 is the optimal level for accumulation. The weekly bullish breaker, which runs from $1,562 to $1,759, is the greatest area for long-term investors to enter if this level gives in. This move will be validated if the price of Ethereum crosses the $2,230 barrier and becomes a floor. In such a scenario, ETH might go back to the $2,784 mark, which it last touched in May 2022.