Although the price of Ethereum is once again trading above a significant psychological support level, it appears that this rally may not last. It will be challenging for the altcoin leader to end this seven-month curse because of investor lack of support and resistance on the one hand.
Ethereum’s value regains crucial support.
The price of ethereum is currently at $2,062, having increased by 6.75% during the previous day. In addition to being essential for ETH to continue rising, the $2,000 support line serves as a critical psychological support level.
The demand for the asset was strong at the start of Q4 but waned as soon as ETH hit $2,124, as evidenced by the recent bullish divergence seen on the RSI. Ethereum has been unable to cross this barrier twice, as it has served as resistance since April.
In April 2021, this level was last successfully breached. Given that the on-balance volume (OBV) has not been rising in line with the price action, even though the relative strength index (RSI) appears to be in the bullish zone, the likelihood of the same happening again is rather low.
In theory, the declining trend is likely to continue when price and OBV are both making lower peaks and lower troughs. This indicates that ETH’s breakout from the downtrend line is probably a fakeout, and the coin will revert to its previous level of support, which is $2,000. This would return it to $1,900 or $1,795 in the neighborhood.
In the unlikely event that investors hold on, Ethereum might be able to test resistance at $2,124 once more. If it were broken, the bearish thesis would be refuted, and ETH would be able to reach $2,200.
Big-budget owners remain cautious.
The fact that large wallet investors like whales and institutions are not supporting Ethereum is one of the main reasons it isn’t able to break $2,124. Even Solana’s $13.6 million was exceeded by ETH’s meager $3.3 million from institutions for the week ending November 17.
Even though the month-to-month flows appear to be improving, ETH is still experiencing $55 million in outflows year to date.
The whale also discusses holding between 100,000 and 1 million ETH, which has been a major factor in the price movement. They sold almost $948 million worth of 460,000 ETH in less than two days in order to book profits and offset losses, bringing their holding to 20.06 million ETH, suggesting that even they are currently dubious.
Therefore, the price action of Ethereum is likely to remain unstable as long as these important cohorts do not support it.