In the past few days, the cryptocurrency market has experienced a strong rise, with Bitcoin prices hitting an all-time high. However, this surge triggered profit-taking sentiment, leading the market to briefly peak. Particularly for Ethereum, as large investors began to withdraw funds, its price struggled to maintain above recent highs. Therefore, the ETH price may experience a short-term correction in the future.
Ethereum struggles to meet buying demand.
With Bitcoin repeatedly hitting new highs and improvements in the overall economic situation, the market has generally rebounded, pushing Ethereum's price to an eight-week high of $2,731. However, due to many short-term investors selling to lock in profits, Ethereum is currently struggling to attract strong buying interest.
According to Coinglass, over $40.66 million in Ethereum positions were liquidated in the past 24 hours. Among them, buyers liquidated $15.12 million, while sellers liquidated $25.54 million. Meanwhile, data from IntoTheBlock shows that large transaction volumes have sharply declined, dropping from $12.24 billion to $3.28 billion in just three days.
This indicates that large investors are withdrawing, thus weakening the upward momentum of ETH prices. As whales exit, sellers may gain the upper hand in the short term, potentially leading to a price correction.
Despite recent price fluctuations, DeFi activity on Ethereum continues to grow. The total value locked in Ethereum surged from $50.63 billion on April 26 to $62.7 billion on May 26, increasing by over 25% in less than a month.
Some of the platforms with the largest increases include Pendle, which saw deposits grow by over 50%, and Ether.fi and EigenLayer, both achieving a 48% increase. Ethereum still leads all blockchains in terms of TVL, holding 54% market share. In comparison, among Layer-1 networks, Solana holds 8%, and BNB Chain holds 5%.
As many investors remain optimistic about a rebound, this strong DeFi growth may help support ETH's price and reduce the likelihood of a significant drop.
What will be the next movement of the ETH price?
Ethereum recently encountered resistance around $2,731, breaking below the current Fibonacci level. With the strengthening of bearish forces, buyers are struggling to trigger a rebound. As of the time of writing, the ETH price is $2,535, having fallen over 0.6% in the past 24 hours.
The ETH/USDT currency pair may drop to the 100-day moving average (approximately $2,456), which is an important support level worth monitoring. If the price rebounds strongly from that point, buyers may attempt to break through $2,750 again. If successful, the price could rise towards $3,000. There is some resistance around $2,870, but it may not last long.
However, if the price falls below the 100-day moving average, this bullish outlook may change. In that case, the currency pair may further decline towards the downward trend line at $2,329. With the price hovering below the midline, the likelihood of a bearish correction in ETH price is increasing.
