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Ethereum (ETH) has recently faced significant price movements, breaking below key support levels. This article explores the reasons behind Ethereum’s recent price decrease and potential future trends.
Ethereum Price Analysis: Key Support Levels Broken
Ethereum’s price has experienced a downward trend, breaking below several crucial support levels. After hitting resistance at the 100 EMA on the 4-hour chart, ETH dropped to a low of $3,500. The break below the EMA 200 on the 4-hour chart and the critical support level at $3,577 indicates a bearish outlook. Additionally, ETH has exited the important volume profile range between $3,640 and $3,880, suggesting the potential for high volatility and further declines.
Large Holder Activity and Market Sentiment
The behavior of large Ethereum holders, often referred to as “whales,” can significantly influence market dynamics. Data from Glassnode shows the number of Ethereum addresses holding 10,000 ETH or more. From January to June, there has been a declining trend in these addresses, suggesting that some large holders are distributing their holdings, potentially signalling a bearish sentiment or profit-taking.
Analysis of Ethereum Addresses with 10,000+ ETH (May 1 – June 10)
During this period, the mean number of addresses was approximately 967.73, with a standard deviation of 7.17, indicating moderate variability. The number of addresses ranged from a low of 952 on May 19 to a high of 981 on June 8. The increase in large holder addresses during the price correction to $3,500 indicates strong conviction among these holders, as they maintain balances of over 10,000 ETH.
Mid-Level Holder Activity and Market Sentiment
Mid-level holders, those with 1,000 ETH, also play a crucial role in market sentiment. Data from Glassnode provides insights into their behavior. From May 1 to June 10, the mean number of addresses was approximately 5,456.78, with a standard deviation of 24.85. The number of addresses decreased, hitting a low on June 10, which might suggest that mid-level holders were taking profits or feeling less confident in the market.
Analysis of Ethereum Addresses With 1,000+ ETH (May 1 – June 10)
The number of large Ethereum addresses dropped, reaching a low point on June 10, indicating potential profit-taking or reduced confidence among mid-level holders. This low level was last observed in September 2016, further emphasizing the bearish sentiment.
Strategic Recommendations: Key Bearish Indicators
Break of EMA 200 on the 4-Hour Chart: ETH breaking below the EMA 200 on the 4-hour chart suggests a potential for further downside.
Decline in Mid-Level Addresses: The steady decrease in ETH addresses holding 1,000 or more coins indicates that mid-level holders are likely taking profits, showing reduced market confidence.
Exit from Key Volume Profile Range: ETH has exited the crucial volume profile range between $3,640 and $3,880, which could lead to increased volatility and further declines.
Key Support Levels to Watch
- $3,577: Recently broken, this level was an important baseline plateau indicating a bearish outlook.
- $3,500: A psychological support level where ETH found some stability.
- $3,420: Another critical support level to monitor for potential bearish continuation.
As noted in previous analyses, setting buy orders near key support levels at $3,575 and $3,400 is recommended. Consider taking profits at resistance levels around $4,134 and $4,390, or opt to hold for longer-term gains.
Conclusion
The continuous growth and demand for Bitcoin and other cryptocurrencies indicate a robust market movement leading up to the halving event. With the significant influx of investments and trading activities, the cryptocurrency market showcases its dynamic nature and potential for future gains.
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