The Ethereum market has faced immense selling pressure in the recent past emanating from whale selling led by the US spot Ether ETF issuers.
After being rejected at the resistance level around $2.7k again, Ethereum ETH $1 922 24h volatility: 4.1% Market cap: $231.79 B Vol. 24h: $16.27 B price has since dropped below $2.4K in an attempt to rejuvenate its bullish sentiment. The large-cap altcoin dropped around 1.8 percent in the past 24 hours to trade about $2,394 on Thursday, during the mid-European session.
From a technical analysis point of view, Ethereum’s price has been attempting to rebound from the crucial support range between $2,300 and $2,250 in the past two months. Moreover, the Ether price against Bitcoin BTC $85 408 24h volatility: 2.1% Market cap: $1.69 T Vol. 24h: $27.20 B has already formed a double bottom coupled with a bullish divergence in the Relative Strength Index (RSI), signaling the onset of the much-anticipated altseason.
According to a popular crypto analyst Ali Martinez, Ether’s price could be forming a potential symmetrical triangular pattern in the daily time frame, which is often followed by a major bullish breakout.
From a different perspective, Ether’s price against the US dollar could be forming an inverted head and shoulders (H&S) pattern, coupled with a rising divergence in the daily RSI.
As a result, if Ether’s price potentially breaks above the resistance level of around $2,700, a major bull run toward its all-time high will be inevitable. On the other hand, a consistent close below the support level of around $2,250 will lead to further altcoin capitulation in the near term.
Each time #Ethereum breaks above the TD setup resistance trendline 🔴, a strong bull run follows. But when $ETH breaks below the TD setup support trendline 🟢, we've seen an average 53% correction.
The key support now is $2,250—losing it could trigger a significant price drop. pic.twitter.com/PljkRda78S
— Ali (@ali_charts) October 10, 2024
China Joins Ethereum Whales in Market Selloffs
According to on-chain data analysis from the OTC Research firm, the Chinese government has begun the sale of the remaining 542k Ether, worth over $1.3 billion, seized from the PlusToken scam. In the last 24 hours, the Chinese government transferred 15.7k Ether to an unknown address, with experts speculating sales in hindsight.
Furthermore, the Chinese government then sent 7k Ether to addresses associated with crypto exchanges in the past 24 hours.
In early August, the remnants of ETH seized from the multibillion dollar PlusToken scheme awoke on-chain for the first time since 2021.
Over the last 24h about 7k ETH of the remaining 542k ETH ($1.3b) was sent to exchanges indicating intent to begin selling the remaining tokens. pic.twitter.com/tu2o7y4o4L
— ∴FreeSamourai∴ (@ErgoBTC) October 9, 2024
Although the Ethereum market can comfortably absorb the recent selling pressure, the short-term outlook will remain bearish. In addition to the Ethereum Foundation and Vitalik Buterin making regular Ether sales, the demand from the US spot Ether ETF issuers has significantly declined in the recent past.
On Wednesday, the US spot Ether ETFs did not register any cash inflow, thus the cumulative total net inflow is about negative $561 million.
Bigger Picture
The Ethereum network has grown steadily in the past years, fueled by the notable upgrades geared to make its smart contracts more user-friendly. For instance, Ethereum transitioned from the power-consuming Proof-of-Work (PoW) consensus method to the Proof-of-Stake (PoS) and has since attracted more participants through its staking program.
According to the latest market data, more than 34.8 million Ether, accounting for about 28.9 percent of the total circulating supply, has been staked by thousands of validators to secure the network.
Consequently, the Ethereum ecosystem has grown to a robust web3 ecosystem with more than $44 billion in total value locked (TVL) and over $84 billion in stablecoins market cap.
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