After Ethereum's price approached its all-time high of $4,878 just a few days ago, it is now trading below $4,300. Despite this decline, it has maintained a strong monthly gain of 15.3%, showing some resilience.
While many short-term traders rush to buy stocks when they dip, things do not look good for short-term traders. A major bearish signal has started to appear on the four-hour chart.
An increase in short-term buyers while reserves remain close to the minimum.
The HODL waves chart for Ethereum shows that new buyers have been slowly accumulating over the past thirty days.
Its share of supply has increased from two main short-term groups - wallets that held ETH for one day to one week, and one week to one month:
The percentage of the age group from 1 day to 1 week rose from 2.8% to 3.39%.
The percentage of the age group from 1 week to 1 month rose from 6.3% to 8.5%.
This is a clear signal of renewed buying. It indicates increasing 'buying on the dip' activity among traders who likely entered the market during the recent pullback.
HODL waves show the percentage of tokens held over different time periods, helping to identify shifts between long-term and short-term holders.
At the same time, Ethereum reserves inexchangeshover around their lowest levels in nine years. Even after whale-driven Ethereum flows, reserves have changed little from 18.389 billion Ethereum on August 15 to 18.404 billion Ethereum at the time of publication.This price is still very low, meaning new purchases continue to occur every time Ethereum's price drops.
Low reserves generally mean less ETH available for immediate sale - another good sign if traders are leaning towards long buying.
A pattern that could lead to Ethereum's price rising to $4000.
Despite bullish signals from buyers and exchange flows, the short-term chart shows a potential problem.
On the four-hour chart, the 20-period exponential moving average (red line) is about to cross below the 50-period exponential moving average (orange line) - a 'deadly' bearish crossover. If this occurs, it is usually considered a sign of impending selling pressure.
EMA is a type of moving average that gives more weight to recent prices, helping traders respond more quickly to recent market changes.
An EMA crossover occurs when a shorter-period EMA crosses with a longer-period EMA, often indicating a change in the price trend.
Moreover, Ethereum's price is currently forming a descending triangle pattern, a bearish continuation pattern. It is now testing two important support levels: $4,216 and $4,189. Breaking these levels could lead to an intense sell-off.
The heat map also shows weak demand areas just below these levels. There is little strong support at these levels, meaning that Ethereum's price could quickly drop to $4,006 if sellers dominate the market.
Let's stay connected in the world of digital cryptocurrencies!
Follow to share news and opinions.
#builtonsolayer @Solayer labs