In the last few days, the cryptocurrency market has shown strong growth, and the price of Bitcoin reached a new all-time high. However, this growth has provoked profit-taking sentiments, causing the market to temporarily peak. Ethereum, in particular, has struggled to stay above its recent high as large investors began pulling out their money. As a result, a short-term price correction for ETH may be ahead.
The overall market rebound, triggered by Bitcoin reaching new all-time highs and improving general economic conditions, has helped raise the price of Ethereum to an eight-week high of $2731. However, it is now facing challenges in attracting strong buyer interest as many short-term investors have already sold to take profits.
According to Coinglass, over $40.66 million in Ethereum positions were liquidated in the last 24 hours. Of this, $15.12 million from buyers and $25.54 million from sellers. Meanwhile, data from IntoTheBlock shows a sharp decline in the volume of large transactions, dropping from $12.24 billion to $3.28 billion in just three days.
This indicates that large investors are retreating, weakening the bullish momentum of ETH's price. With the whales retreating, sellers may gain the upper hand in the short term, which could lead to a price correction.
Despite some recent price difficulties, Ethereum's activity in the DeFi space continues to grow. The total value locked in Ethereum rose from $50.63 billion on April 26 to $62.7 billion by May 26, marking an increase of over 25% in just one month.
Some of the biggest gains have been seen on platforms like Pendle, where deposits increased by more than 50%, as well as Ether.fi and EigenLayer, both of which showed a 48% increase. Ethereum still leads among all blockchains in TVL, holding 54% of the market. In comparison, Solana holds 8%, and BNB Chain holds 5% among level 1 networks.
This strong growth in DeFi may help support the price of ETH and reduce the likelihood of a major decline, as many investors maintain an optimistic outlook regarding the rebound.
Recently, Ether faced resistance around $2731, leading to a drop below immediate Fibonacci levels. As bears strengthen their dominance, buyers are finding it difficult to provoke a recovery rally. At the time of writing, the price of ETH is trading at $2535, down more than 0.6% in the last 24 hours.
The ETH/USDT pair could drop to the 100-day EMA (around $2456), which is an important support level to watch. If the price strongly rebounds from this point, buyers may make another attempt to overcome $2750. If successful, the price could rise to $3000. There is some resistance around $2870, but it is unlikely to hold for long.
However, if the price falls below the 100-day EMA, this bullish outlook may change. In this case, the pair could drop further to the descending trend line at $2329. As it fluctuates below the midpoint, the chances of a bearish correction for ETH's price increase.
$ETH , $SOL , $XRP
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