Ethereum encountered resistance at the $2,800 threshold.
ETH decreased by 11.5% over a five-day period, from $2,738 to $2,426
Significant ETH withdrawals from exchanges were noted on May 16, indicating accumulation
The Coinbase Premium Index reveals heightened interest from U.S. traders
Taker sell orders significantly outnumber buy orders, suggesting selling pressure
Trading volume has been dwindling, mirroring patterns observed in December 2024
Ethereum has undergone a substantial price adjustment during the last week, plummeting from $2,738 on Tuesday to $2,426 at the time of writing. This marks an 11.5% reduction in just five days, prompting many traders to ponder whether this is merely a brief correction or the onset of a more serious trend reversal.
The cryptocurrency has displayed mixed signals regarding trader interest. On one hand, unfavorable exchange netflows imply that accumulation is occurring. May 16 witnessed the largest ETH withdrawal from exchanges since early April, which typically signifies that investors are relocating their assets to private wallets for extended holding.
The Coinbase Premium Index, which monitors the price disparity between Coinbase and Binance, has maintained a positive stance over the past month. This measure reflects growing interest from U.S.-based traders, a trend that has remained steady since ETH began its climb from $1,600.
Nonetheless, not all indicators favor Ethereum’s price future. In spite of the positive premium, ETH suffered rejection at the $2,800 threshold.
Selling Pressure Increases
The 7-day moving average of the taker buy-sell ratio has rapidly declined over the past week. This measure indicates that taker sell orders significantly exceed buy orders in the market. Given that these are market orders, they imply heightened selling pressure as some holders seem eager to realize profits.
This trend bears similarities to market conditions observed in December 2024, which preceded a steep price drop. Investors should be mindful of these parallels when making trading choices.
Trading volume has also been steadily decreasing in recent days. The spot volume bubble map indicates minimal trading activity during April’s low, with green bubbles signifying a volume reduction. This contrasts with December 2024, when a notable increase in trading volume was identified as “overheating” before Ethereum encountered a sharp downturn.
The declining trading volume as ETH nears the $2,600-$2,800 resistance zone may signal buyer hesitation. Alternatively, it might imply that selling pressure from profit-takers has not been excessive, supporting the notion of a market correction rather than a complete trend reversal.
ETH is presently trading below $2,450 and the 100-hourly Simple Moving Average. Technical analysis reveals a bearish trend line with resistance at $2,540 on the hourly chart.
If Ethereum succeeds in surpassing the $2,550 resistance level, it could potentially advance towards $2,580. A definitive break above this level might pave the way to the $2,700 zone or even $2,780 shortly.
On the other hand, if Ethereum is unable to breach the $2,500 resistance, it may face further declines. Initial support is located near $2,400, with significant support at $2,350. If the price declines below this threshold, it could test support at $2,320 or possibly drop to $2,220.
The latest market data indicates that Ethereum has stabilized above the 61.8% Fibonacci retracement level of the upward movement from $2,308 to $2,509, suggesting some support at current levels.
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