- Ethereum faces a critical $2200 resistance; breaking above it could trigger a strong bullish trend.
- Large Ethereum inflows to Binance suggest potential selling pressure, with whales likely preparing to exit.
- The synchronized Bitcoin and Ethereum transactions point to investors gearing up for a possible market correction.
Ethereum is currently trading at a crucial point near the $2,200 price level, forming a major resistance point. If the cryptocurrency manages to close a daily candle above this level, then it will validate a continuation of the bullish trend. Nonetheless, should ETH remain below this level, it would experience increased selling pressure, keeping investors and traders guessing.
According to analyst, the $22,000 level is significant in determining Ethereum’s trend in the upcoming days and weeks. However, as long as the price remains below the 21-day moving average (MA), there is a tendency to be cautious. A clear breakout and daily close above $2200 will be a great setup for the bulls, thus indicating higher highs in the Ether price. Otherwise, the price may fail to continue on its upward trend or may reverse and move down in the subsequent days.
Source: X
Ethereum Inflows Signal Selling Pressure
The analysis of data from CryptoQuant shows that ETHnis flowing into one of the largest cryptocurrency exchange, Binance. In particular, 92,159 ETH were transferred to Binance, which is commonly linked to increased selling activity. Most large transactions on exchanges occur before prices go down because whales are dumping their holdings on the markets. This could reduce the likelihood of Ethereum, regaining the lost ground as the outflows reduces the buying pressure on the digital asset.
Source: CryptoQuant
A similar pattern was registered on April 3rd when the price drop came immediately after a boost in Ethereum deposits at Binance. Currently traders and analysts are now afraid that it may happen this way again. Large trading firms rely on Binance for immediacy, trading without moving the price of the assets. This means that the recent flows could be a demonstration of profit taking by large investors.
Whale Activity and Market Sentiment
The ETH inflow was equally matched by a high level of transactions in Bitcoin too. Whale wallets transferred over $500 million worth of Bitcoin to exchanges a few minutes before ETH deposit happened. This synchronized movement of both assets goes hand in hand with the possible sentiment that large investors are positioning themselves for a market correction. This may have contributed to the general risk-off observed in the markets but more so due to the increased tension in the US and China trade war.
Source: CryptoQuant
Ethereum is currently at a crossroads. The particular token stands at a crucial level of $2,200, and a breakout above this level may lead to a bullish trend. Altogether, the influx of Ethereum to Binance, along with other factors, makes the market even more uncertain. The respective investors should be very cautious, with extreme focus on the market, since the coming days will dictate the fate of Ethereum bulls.
Read More: XRP’s Key Resistance: Can It Break $2.5 to Start a Bullish Reversal?
