Despite Ethereum's 91% rise from its yearly low, the second-largest cryptocurrency's price remains stuck below the $3,000 mark. Whale activity has seen 200,000 ETH sold, totaling $530 million. Will ETH break through to $4,000?
On-chain data shows that Ethereum whales have started disengaging, selling the equivalent of $530 million in tokens. Their wallet has decreased from 103.74 million ETH on May 24 to 103.52 million today, representing a drop of 200,000 tokens.
This massive sell-off coincides with a decrease in social volume surrounding Ethereum. Dropping from a peak of 3,060 earlier this month, ETH’s social volume now stands at only 476, suggesting that traders are less active in discussions on major platforms like Telegram or X. High social activity often signals an impending price surge.
Beyond whale behavior and social traction, the Ethereum network faces other challenges. Recent data from growthepie reveals that the number of active addresses on Ethereum’s Layer 1 and 2 was only 415,000 on Tuesday, significantly lower than Base’s 1.93 million or Celo’s 486,000.
Furthermore, the amounts paid to Ethereum by these Layer 2 networks have plummeted. Base, for example, only disbursed $112,000 in the last 30 days, marking a 57% decline. Arbitrum One and Optimism paid $39,000 and $13,000, respectively, both experiencing double-digit decreases.
Technically, Ethereum’s daily chart shows that the price has stagnated in recent weeks after repeatedly testing a critical resistance level at $2,722, which is the 50% Fibonacci retracement point.
However, Ethereum has formed a bullish pattern by rising above its 200-day moving average last night, reaching a peak of $2,780.
Currently at $2,727, ETH is holding above this moving average. If it can sustain this, it could potentially target the upper end of the Mean Reversion Channel at $3,030 in the coming days.
A breakthrough at this level would increase the chances of a rally towards $4,000, a significant psychological threshold. Conversely, a drop below $2,333 would invalidate the bullish perspective.
The Volume Profile indicates a POC at $2,550. But below $2,300, there’s a freeway for a cascading drop in ETH’s price. Therefore, caution is warranted in the upcoming days as ETH prepares for a strong move in either direction.
In conclusion, despite Ethereum’s price currently being capped under $3,000, facing significant whale sell-offs and network challenges, the overall technical indicators remain positive. If the price can surpass the $3,000 resistance, it could then soar towards $4,000, a level that now seems within reach for the second most significant cryptocurrency.
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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