Ethereum (ETH) Reaches Key Resistance Level with Overheating Signals, Long-term Holding Trend Coexists with Short-term Pullback Pressure
Recently, Ethereum (ETH) has been influenced by increased trading activity and profit-taking, resulting in an overheated market. Although it briefly broke through the $2600 resistance level over the weekend, it failed to maintain the upward trend, and on Monday, the price fell below $2400 before rebounding to around $2550.
Market data shows that Ethereum is nearing the critical support level of $2500, with market activity significantly increasing. However, a report from CryptoQuant indicates that this price fluctuation is mainly due to profit-taking and stagnation of supply at key price points. Analysts believe that the market may enter a pullback cycle in the short term, requiring consolidation to accumulate new demand, which could then drive a mid-term breakthrough of the resistance range.
Despite short-term market signals indicating cooling pressure, long-term holders are showing a continuous accumulation trend. Data indicates that the amount of Ethereum held on centralized exchanges has dropped to a historical low; as of May 19, only 4.9% of the total supply of Ethereum is held on exchanges. Over the past five years, a total of 15.3 million ETH has flowed out of exchanges, with over 1 million ETH leaving exchanges just last month.
On-chain data further confirms this information, as whale addresses holding over 10,000 ETH have cumulatively increased their holdings by 450,000 since late April. As of May 10, their total holdings reached 40.75 million ETH, a new high since March.
Additionally, the Pectra upgrade has boosted market confidence, with inflows into Ethereum-related investment products reaching $205 million in the past week and a total of $757 million year-to-date.
Conclusion:
In summary, Ethereum is currently at a critical technical juncture, with short-term pullback pressure intertwined with a long-term accumulation trend.
Although the market shows overheating signals in the short term due to profit-taking and key resistance levels, in the long run, the continued decrease in exchange reserves, the accumulation by whale addresses, and the inflows into investment products all indicate a strong confidence in Ethereum's long-term value.
However, Ethereum's upcoming price trajectory will depend on the depth of the short-term pullback and the sustainability of long-term demand. Investors need to closely monitor market dynamics and make cautious decisions.
