Ethereum (ETH) has been on a bullish tear, trading at $1,914.85, up 4.44% in the last 24 hours, as it nears a significant resistance level around $1,860. However, the journey toward a breakout is complicated by a cluster of wallets holding over 5.5 million ETH between $1,850 and $1,880. With many of these holders likely looking to exit at break-even, the sell pressure at this price point could significantly stall Ethereum’s momentum.
In addition to this resistance zone, there are signs that rising whale activity and exchange reserve levels could introduce higher volatility. As ETH climbs toward this psychological resistance, it faces rising risks, particularly from the growing number of traders with long positions in the derivatives market.
A Barrier of 4.5 Million Wallets: Sell Pressure Looms
Nearly 4.5 million Ethereum wallets are currently holding between $1,850 and $1,880, according to recent on-chain data. This significant concentration of ETH could trigger selling activity if the price nears these levels, as many holders may seek to exit with minimal losses. This concentration creates a resistance zone that Ethereum must break through in order to sustain its bullish momentum.
The $1,860 level is psychologically important as well. Having climbed significantly in recent weeks, Ethereum’s price is likely testing the nerves of investors who may look to capitalize on recent gains. As a result, Ethereum’s ability to maintain its upward momentum while these large holders prepare to sell could be key to its success.
Exchange Reserves Rise: Signals for Profit-Taking
Rising exchange reserves further complicate the outlook for Ethereum. Over the past 24 hours, exchange reserves for ETH have climbed by 4.32%. This increase typically indicates that investors are preparing for selling, particularly in the face of rising resistance. With more ETH being moved onto exchanges, there is the potential for significant sell-offs that could limit Ethereum’s ability to break the $1,860 mark.
While some of these inflows may be related to hedging or the opening of new long positions, the overall uptick in exchange reserves suggests that investors are preparing for potential profit-taking. As Ethereum tests the resistance zone, increased selling pressure could dampen its chances of a clean breakout.
Long Positions Soar, But Risk of Liquidation Builds
Ethereum’s recent rally has been fueled by aggressive long positions in the derivatives market. Open interest has surged by 10.07%, indicating a significant increase in bullish positions. Additionally, the Long/Short ratio on major exchanges such as Binance shows that 59.5% of traders are holding long positions, compared to just 40.5% short.
While this dominance in long positions reflects positive sentiment, it also introduces significant risk. If Ethereum fails to break through the $1,860 resistance level, traders with leveraged positions could face forced liquidations, which might lead to increased downward pressure. This liquidation risk is especially heightened as Ethereum approaches a key price level.
Whale Activity and Large Transaction Volume: Caution Ahead?
Despite Ethereum’s positive price action, whale behavior signals caution. Large transaction volume has dropped by 5.44%, which is often a sign of hesitation or strategic exits by larger holders. Typically, large transaction volume surges ahead of major breakouts, but the current decline suggests that whales are reducing exposure rather than increasing it.
This shift in whale behavior weakens the bullish narrative, indicating that large investors may be hesitant to fully support a breakout at this time. As such, Ethereum’s path forward may depend on retail investor support and whether institutional players decide to re-enter the market with strong conviction.
Bullish Reversal Signals: Inverted Head and Shoulders Pattern
Technically, Ethereum’s chart structure remains promising. A clean breakout above a long-term descending trendline has set the stage for a potential bullish reversal. The formation of an inverted head and shoulders pattern suggests that if Ethereum holds above the neckline, it could experience sustained upward momentum.
Additionally, the Parabolic SAR (Stop and Reverse) indicator has flipped bullish, further reinforcing the possibility of continued upside. As long as Ethereum maintains its position above the neckline of the pattern, the chances of a breakout remain intact.
Breaking $1,860: Ethereum’s Next Step
Ethereum’s current price action is characterized by strong technical indicators and rising retail enthusiasm. However, the on-chain data presents a significant challenge at the $1,860 resistance zone, with whale caution and rising sell-side pressure clouding the outlook.
If Ethereum can break above the $1,860 level, it may trigger a fresh round of buying activity, paving the way for a new leg higher. On the other hand, failure to breach this resistance could lead to increased volatility, a spike in liquidation activity, and a potential retracement back toward lower support levels.
As the price action unfolds, traders will need to monitor Ethereum’s ability to break through key resistance zones and maintain momentum in the face of increasing market pressure.
Post Views: 28