ETH Holders Face Selling Pressure as Price Struggles to Sustain Above $2,000
ETH holders face selling pressure as price struggles to sustain above $2,000, leading to decreased demand, accumulation by whales, and a lack of confidence among ETH bulls.
Introduction
In the past four weeks, a significant number of Ethereum (ETH) holders have sold their coins, leading to a decrease in price and a lack of bullish momentum. Although the sell pressure has subsided near the $1,800 range, the recent rally has been less enthusiastic compared to previous instances of sell pressure exhaustion. Data suggests that ETH whales, particularly those holding over 1,000 ETH, have been disinterested in re-accumulating at the current price level. This article examines the state of ETH demand, the behavior of whales, and the impact on price action.
Whale Behavior and Sell Pressure
Addresses holding over 1,000 ETH have contributed to the sell pressure, as indicated by ETH's supply distribution metric. However, addresses holding over 10 million coins have been accumulating ETH over the last four weeks, controlling a significant portion of the circulating supply (17.75% at the time of writing). It is unclear whether these addresses belong to a small number of entities or exchanges. Meanwhile, Ethereum exchange reserves have experienced outflows, potentially indicating staking addresses participating in ETH 2.0 deposits.
Assessing ETH Demand in the Derivatives Market
ETH demand in the derivatives market has shown a significant pullback in the last 10 days, suggesting a lack of excitement. The level of leverage increased briefly in the second week of May, coinciding with ETH's price decline, likely due to short selling. However, leverage has since decreased as short sellers pulled back, reflecting a current stalemate in the market. ETH has been trading sideways around $1,825 for the past five days, indicating low demand despite the recent discount in price over the past four weeks.
Challenges for ETH Bulls and Lack of Confidence
The lack of confidence among ETH bulls is evident in the struggle to regain strength in the market. Despite the recent price decline, demand has remained low, hindering a substantial recovery. This lack of enthusiasm extends beyond ETH and is observed across many top cryptocurrencies.
Conclusion
ETH holders have faced selling pressure in recent weeks, resulting in a price decline and a lack of bullish momentum. Whales holding over 1,000 ETH have contributed to the sell pressure, while those with over 10 million coins have been accumulating. The derivatives market has experienced decreased demand, reflecting a stalemate in the market, and ETH's price has been trading sideways. The challenges faced by ETH bulls and the overall lack of confidence highlight the current state of the market.
