Ethereum has experienced significant price growth, rising 60% in the last month, reaching $2,543. This increase is largely due to substantial accumulation by investors, totaling 1.34 million ETH valued at over $3.42 billion.
Despite the growth, some critically-minded investors are starting to exit the market, seeking to lock in their profits before potential risks arise.
Ethereum investors are actively purchasing the supply
The balance of Ethereum on exchanges decreased by 1.34 million ETH in the last month (from April 21 to May 21), indicating a significant shift in market conditions. This reduction in supply is valued at over $3.42 billion and is largely driven by the Pectra upgrade, which has increased investor confidence in Ethereum's long-term growth.
The reduction in supply on exchanges reflects an increasing belief that Ethereum can continue its upward trend. This desire to acquire Ethereum has created a FOMO (fear of missing out) effect, contributing to the price increase. However, the macroeconomic momentum surrounding Ethereum is mixed, as long-term holders (LTH) exhibit behavior indicative of caution. The Age Consumed metric sharply increased twice this week, indicating that significant volumes of ETH are being sold by LTH to lock in profits.
This is the largest wave of selling in the last seven months, indicating that these holders believe Ethereum may be reaching its market peak. Sales by LTH draw attention to potential risks that could impact Ethereum's future performance. If this trend of profit-taking continues, it could hinder the cryptocurrency's growth. Price increase of ETH
Ethereum is currently trading at $2,543, which represents a 60% increase over the last month. However, the price faces resistance at $2,654. Overcoming this resistance is crucial for Ethereum's continued growth.
The price is likely to rise above this level if Bitcoin reaches a new all-time high (ATH), as Ethereum has a strong correlation with Bitcoin. This move could bring Ethereum closer to $3,000, further strengthening its bullish outlook. If the overall market remains positive, Ethereum's price may continue to rise. However, the market has its risks. If selling pressure from LTH intensifies and the accumulation phase stops, Ethereum's price may struggle to maintain its upward trend. Losing support at $2,344 is likely to lead to a drop to $2,141, which would nullify the current bullish thesis and create a bearish outlook for the cryptocurrency.#BinanceSquare #Write2Earn #crypto #trading #Binance $ETH
