Ethereum Price Movement and Market Insights
Ethereum (ETH) has managed to stay well above $2,400 this week and is hovering close to $2,500 following a significant rally last week. But it seems like the upward momentum is losing steam, as many investors appear to be cashing in on their profits after ETH surpassed its average on-chain cost basis.
The fact that ETH moved past the realized price of $2,306 may have activated some selling pressure from holders who were previously at a loss but are now enjoying modest gains. This aligns with indications of rising exchange inflows since Ethereum climbed back above this level.
Onchain profitability metrics also suggest increased profit-taking. Ethereum’s Spent Output Profit Ratio (SOPR) has stayed above 1 throughout the week, which indicates that, generally speaking, ETH that moved on-chain during this time was sold for a profit.
ETF Inflows and Stablecoin Growth as Support Factors
Even with the uptick in profit-taking, the overall liquidity environment is still favorable. The stablecoin market has continued to expand, infusing new liquidity into the crypto space, with inflows surpassing $4.1 billion over the past two weeks, according to DefiLlama data.
Furthermore, US Spot Ethereum exchange-traded funds (ETFs) attracted $234.51 million on Thursday, marking a streak of nine consecutive days of inflows, as reported by SoSoValue data. This brings the weekly total to $722.24 million, the strongest showing for Ethereum funds in nearly ten months, reminiscent of the momentum witnessed last October. It highlights a persistent institutional interest in Ethereum.
However, the derivatives market has not yet contributed to this rally. Open interest has not shown a significant rebound following a recent flush of leverage and a major short liquidation. The drop in open interest post-short squeeze hasn’t been matched by a substantial number of new long positions, indicating that leveraged traders might still be feeling cautious.
The lack of considerable new leveraged demand could restrict Ethereum’s potential to extend its rally in the short run.
Activity on the network also seems to be quiet, despite the recent rise in ETH’s price. Both transaction numbers and active addresses have dipped over the week, implying that the underlying network usage has not yet validated the upward price movement.
For Ethereum to maintain its rally, we’ll need to see open interest pick up again along with a clear increase in transaction activity and active addresses.
Price Forecast: Ethereum Retests $2,431 Support
In the past 24 hours, Ethereum saw $97.3 million in liquidations, predominantly driven by $75.8 million in long liquidations, according to data from Coinglass.
On the daily chart, ETH is still showing a bullish short-term outlook as it remains above key Exponential Moving Averages (EMAs). The 20-day EMA at $2,261, along with the 50-, 100-, and 200-day EMAs clustered between roughly $2,073 and $2,156, sits below the price, indicating a supported uptrend.
The momentum appears solid, with the 14-day Relative Strength Index (RSI) lingering just below the overbought mark at 69, and the Stochastic Oscillator (Stoch) elevated at 81, suggesting that bullish pressure is still in play, although the rally may be feeling a bit stretched in the short term.
On the downside, immediate support is noted near the recent horizontal pivot at $2,431, which has been a stabilizing point for prices over the past week, followed by the 20-day EMA and previous structural floors at $2,172 and $1,961. If a deeper pullback occurs, it could expose the broader support range defined by the long-term EMAs between $2,021 and $2,156. Below this, we have earlier swing bases at $1,809, $1,701, and $1,507.
On the upside, initial resistance is seen at the horizontal cap around $2,680, followed by a more considerable barrier at $2,879. If the overbought conditions continue, a pause or corrective consolidation would not be surprising.
