Highlights
What is causing Ethereum to face renewed selling pressure?
Trend Research has initiated a second round of ETH sell-off, disposing of 102,355 ETH valued at $455 million since October 1st.
Can Ethereum withstand the selling pressure from whales and retail investors?
Currently, yes. ETH remains strong, trading close to $4,590. If buyers absorb the selling pressure, ETH could retest $4,673 and target $4.8K.
Following the market recovery, Ethereum [ETH] has shown moderate gains. From a low of $3.8k, ETH has been trading within an ascending channel, reaching a high of $4619.
At the moment, Ethereum is priced at $4,590, with a 2.03% increase on the daily charts.
But why is ETH still encountering challenges?
Aggressive selling by Ethereum whales
It has been noted that Ethereum has not seen significant upward movement due to the increasing sell pressure, especially from major players.
Following the market rebound, whales have been actively involved. The Spot Average Order Size has shown Big Whale Orders for three consecutive days.
In the past week, Ethereum has witnessed big whale orders on four out of seven days, indicating heightened activity from large entities.
Source: CryptoQuant
Interestingly, these orders are mainly selling orders as per EmberCN. Trend Research, the on-chain monitor, has been aggressively selling, offloading 41,421 ETH valued at $189 million on October 5th.
Since starting the second round of ETH sell-off on October 1st, they have sold 102,355 ETH worth $455 million.
Source: EmberCN
Due to the increased selling activity, Ethereum’s Exchange Netflow has remained positive for two consecutive days.
Currently, Netflow stands at 81.7k ETH, indicating higher inflows, a sign of aggressive spot selling.
Source: CryptoQuant
Typically, when major players like Trend Research engage in aggressive selling, it indicates a lack of market confidence, a bearish signal.
Retail traders following suit
While whales dominate the Spot market, retail traders have shifted to the Futures market.
According to CryptoQuant, the Futures Average Order Size reflects a majority of Retail Orders. Retail traders have been prominent in the Futures market for two consecutive days.
Source: CryptoQuant
Interestingly, these small-scale traders are predominantly selling. Futures Taker CVD data from CryptoQuant indicates a “Taker Sell Dominant” trend.
A red metric implies that traders are mainly closing their positions, indicating a derisking pattern among retailers.
Source: CryptoQuant
Such market behavior indicates a lack of market confidence, a bearish signal.
Can ETH defy the odds?
Despite the increasing selling pressure from whales and retail traders in the Futures market, Ethereum has shown resilience.
This suggests that the selling spree has not fully impacted the market, indicating significant absorption of sell pressure.
Currently, Ethereum’s Directional Movement Index (DMI) has risen from 20 to 28, signifying a strengthening upward trend.
Source: TradingView
Additionally, Ethereum’s Relative Vigor Index (RVGI) has increased to 0.22, further confirming the upward trajectory.
When momentum indicators align in this manner, it indicates the potential for continued upward movement if conditions remain favorable.
If Ethereum defies the odds and the trend persists, it could reach $4,673 and target the $4.8k resistance level. Breaking this barrier could propel ETH to $5k, as resistance beyond that is minimal.
However, if sellers, particularly whales, dominate the market, ETH may retrace to $4,415 with $4,248 serving as a crucial support level.
Rewrite the following sentence in a different way: “She decided to go for a walk in the park.”