Ethereum (ETH), a top coin in the crypto market, is currently flashing warning signs of potential profit-taking. With a significant portion of its supply now "in the money," historical data suggests this could precede a local price top. Despite recent price increases, weakening buying pressure, as indicated by On-Balance Volume (OBV) divergence, suggests that whales and other large holders might be eyeing their exit points, posing a risk to Ethereum's price prediction.
Ethereum's Supply in Profit: A Precursor to Pullbacks? 🟢
According to Glassnode, a staggering 88.57% of Ethereum's supply was in profit on July 14th, with ETH trading around $3,013. Historically, such a high "Percent Supply in Profit" indicator has often coincided with overheated rallies or periods of post-rally exhaustion. This means a large number of holders are sitting on gains, making them more likely to sell and realize those profits. While the price of ETH continued to climb from June 11th to July 14th, this metric suggests that a wave of profit-taking could be imminent, impacting Ethereum's price trajectory.
Divergence Warnings: Are Whales Losing Interest? 📊
Despite the upward price movement, the On-Balance Volume (OBV) for Ethereum has been forming lower highs. This bearish divergence signals that fewer traders are participating in the current price rally, indicating a weakening of buying pressure. For whales, this divergence is a critical warning sign. It suggests that while the price might be rising, the underlying demand supporting that rise is dwindling, making the rally vulnerable. This lack of strong volume confirmation could prompt large holders to reduce their exposure, further exacerbating the risk of a price correction for this top coin.
Key Price Levels: Support or Break for Ethereum's Future? 📈
Ethereum's price recently hit resistance at $3,079 and is now consolidating around $2,981. Immediate correction support levels are identified at the Fibonacci retracement levels of $2,853 (0.236 Fib) and $2,713 (0.382 Fib). However, the most critical support zone lies at $2,600 (0.5 Fib) and $2,487 (0.618 Fib). The broader bullish structure for Ethereum remains intact as long as the price stays above $2,713. A decisive break and close above $3,079, coupled with an upward trend in OBV, would invalidate the short-term bearish hypothesis, signaling renewed buying confidence. Until then, the risk of profit-taking and volume divergence calls for caution among whales and retail investors alike.
Conclusion ✨
Ethereum's price is currently at a crucial inflection point, facing significant profit-taking risks due to a high percentage of its supply being in profit and weakening buying volume. While the broader bullish trend remains, the immediate future hinges on its ability to maintain key support levels. The actions of whales and the market's reaction to these technical signals will largely determine if Ethereum can push to new highs or undergo a necessary correction. Caution remains paramount for this top coin.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry a high level of risk and volatility. Always conduct your own research (DYOR) and consult a professional financial advisor before making any investment decisions.