Ethereum Price Weakens as Long-Term Holders Sell

Ethereum’s price continues to trend downward as a notable shift in market dynamics unfolds. Long-term holders are ramping up their selling activities at the fastest rate seen since 2021, contributing to a bearish market sentiment for ETH.

Summary of Current Trends

• Price Decline: Ethereum is currently trading around $3,211, reflecting a worrying 10% drop over the last 24 hours. The price has also fallen 4% for the week and 21% over the past month, sitting approximately 35% below its August peak of $4,946.

• Increased Trading Volume: Despite the price drop, trading volume surged by 32.7%, hitting $49.6 billion. This rise indicates heightened activity, as more traders enter the market amid falling prices.

• Derivatives Market Activity: Derivatives trading has seen a 27.6% increase, reaching $139.7 billion in volume. However, open interest has decreased by about 7%, suggesting that traders are more inclined to close existing positions rather than adding new leverage in a declining market.

Long-Term Holders Increasing Sales

Recent data from Crypto analytics platform Glassnode highlights a concerning trend. Long-term Ethereum holders, defined as wallets that have maintained their ETH for 3 to 10 years, have been averaging the sale or movement of over 45,000 ETH per day in recent months. This marks the highest level of activity since February 2021.

Implications of Selling Pressure

The acceleration in selling among long-term holders typically signals efforts to secure profits or mitigate exposure following significant rallies. This rapid selling trend may necessitate more time for the market to stabilize before buyers return with renewed confidence.

CryptoQuant also indicates that Ethereum’s Net Taker Volume—a key metric reflecting market activity—is currently negative. Although selling pressure in the futures market has decreased compared to results from September, sellers still dominate, suggesting buyers have yet to regain control.

Technical Analysis of Ethereum Price

From a technical perspective, Ethereum’s price is hovering near the lower Bollinger Band on daily charts, a clear indication of sustained market pressure. All major moving averages, from the 10-day to the 200-day, remain below the current trading price, reinforcing the prevailing downward trend.

Key Indicators

The Relative Strength Index (RSI), sitting at 34, has not yet plunged into oversold territory but does exhibit waning momentum. The Moving Average Convergence Divergence (MACD) is also negative, indicating weakness in short-term price movement.

For any significant bullish recovery, ETH needs to reclaim the range between $3,350 and $3,400, which has established itself as a resistance level. Failure to maintain support above $3,000 could lead to further declines, with critical price levels to monitor set at $2,850 and $2,700.

Final Observations

The current market landscape for Ethereum presents a complex interplay of selling pressure from long-term holders and a response from traders influenced by technical indicators. As the situation develops, it will be crucial to observe how new buying sentiment evolves amid these prevailing bearish conditions. The focus remains on whether ETH can stabilize or if it will succumb to further declines in the short term.