After this, the price of ether (ETH) dropped sharply rejection for $2,400 last week, and on Monday it fell to just $2,100, indicating that the bears are once again “in control,” according to a novel analysis.
Key takeaways:
- Ether falls 12% after rejection at $2,400 as bears regain control.
- Binance selling pressure and ETF outflows signal feeble demand for ETH.
- Analysts warn that ETH/USD could fall towards $1,700 if the $2,000 support is broken.
ETH bears are selling aggressively
Data from TradingView shows ETH trading at $2,100, down 12% below the local high of $2,420 reached on May 6. On Sunday, ETH/USD hit $2,090 on Bitstamp, its lowest level since April 17.
ETH/USD 1-hour chart. Source: Cointelegraph/TradingView
Bearish sentiment may return to the Ether market as a key indicator from Binance, the largest cryptocurrency exchange by trading volume, shows sellers starting to dominate the platform’s volume.
Related: Rising oil prices put pressure on ether sales: Tom Lee
Binance taker buying volume, which measures the total dollar amount of aggressive sell orders placed by traders on Binance futures, rose above $1.1 billion within an hour on Sunday, while ETH fell to levels below $2,100.
When this indicator rises sharply during price declines, it often indicates forced risk reduction or forceful short-term bear pressure from dynamic market participants.
Ether Observed “Large, Aggressive Spikes in Binance Sales Volume While Testing Important Downside Levels,” CryptoQuant Analyst Amr Taha he said in Monday’s QuickTake note, adding:
“This does not necessarily confirm the beginning of a deeper downtrend. However, it shows that sellers were clearly in control during the move.”
ETH Taker sales volume on Binance. Source: CryptoQuant
Increasing outflows from ETH investment products have increased selling pressure.
Data from SoSoValue shows that US Ethereum spot ETFs have seen five consecutive days of net outflows totaling $255 million.
This suggests that “institutional momentum has hit a local wall for Ethereum,” a Whale Factor analyst he said in Sunday’s post adding:
“This intensive sell-side distribution keeps prices under tight control for now.”
Spot ETH ETF flow chart. Source: SoSoValue
Global Ethereum investment products also saw an outflow of $249 million in the week ending May 15, the most since January 30, data from CoinShares can be seen.
A $3.5 million ETH cluster priced at $2,000 could stop the sell-off
According to Ether cost-based distribution datainvestors hold approximately 3.85 million ETH at an average cost of $2,000-$2,100, creating a potential support zone. This concentration suggests that many investors could enhance their positions at breakeven, potentially mitigating another ETH price collapse.
Etherum cost base distribution chart. Source: Glassnode
As Cointelegraph reportedETH price could potentially drop to $1,700 after confirming a rising wedge pattern on the daily time frame. However, traders say the bearish trend could be stopped if ETH/USD stays above $2,000.
“$ETH Dipped Below $2,100 As It Failed to Hold the $2,150 Support Zone” he said cryptocurrency analyst Ted Pillows in post X on Tuesday, adding:
“The next key support for Ethereum is the $2,050-$2,070 level, which could provide some recovery.”
ETH/USD daily chart. Source: X/Ted pillows
Technical Analyst Donald Dean he said ETH bulls need to defend the “lower shelf volume support near $2,100” to avoid a move below the ascending channel on the daily chart.
ETH/USD daily chart. Source: X/Donald Dean
Fellow Cryptorphic analyst he said if the ETH/USD pair fails to “hold this area and consolidate below it, we may see a continuation towards lower support levels,” adding:
“The recent split below the local support area shows that buyers are getting weaker in the short term.”
Meanwhile, CEO of Sharplink he noticed three catalysts needed for ETH’s price surge, including passage of the CLARITY Act in the US, a return of market-wide risk appetite, and an enhance in the actual tokenization of assets on Ethereum.
