Ethereum Under Pressure, Analysts Weigh Accumulation or Distribution Phase
Ethereum, the second-largest cryptocurrency by market capitalization, has been experiencing significant pressure in recent weeks. As its price continues to fluctuate, analysts have been closely monitoring market signals to determine whether the current phase is one of accumulation or distribution.
Exchange Reserve Metric Signals Distribution Phase
According to a recent analysis by CryptoQuant analyst Shayan, the Ethereum exchange reserve metric, which tracks the amount of ETH held in exchange wallets, is providing valuable insights into this question. Shayan disclosed in the analysis that the Ethereum exchange reserve metric has shown a notable upward trend between June and August, indicating a distribution phase that has contributed to the ongoing bearish trend.
This metric is particularly noteworthy given that coins held on exchanges are often considered ready for sale, which can lead to increased selling pressure. The recent “death cross” on Ethereum’s price chart, where the 100-day moving average crossed below the 200-day moving average, has raised further concerns.
Potential Decrease in Demand and Price Decline
Shayan noted that the increase in reserves on exchanges could point to a potential decrease in demand for Ethereum, which might lead to further price declines. However, the analyst emphasized that the state of the futures market, a critical factor in price determination, must also be analyzed before making “definitive conclusions.”
Ethereum’s Price Action and Market Sentiment
Despite the concerning signals from the exchange reserve metric, Ethereum has managed to stage a modest recovery over the past day. The cryptocurrency has seen a 2.2% increase, bringing its current trading price to $2,515 at the time of writing. However, this uptick does little to offset the 7% decline Ethereum has experienced over the past week.
Renowned crypto analyst CrediBull, commenting on Ethereum’s recent price action, emphasized that the situation is still evolving. He noted that nothing has really changed on ETH, and the market is simply back at its local lows. CrediBull suggests that Ethereum might sweep the lows into local demand before forming a deviation and potentially moving higher.
Conclusion
The Ethereum market is currently facing significant pressure, with analysts weighing the possibility of an accumulation or distribution phase. The exchange reserve metric signals a distribution phase, which could lead to a potential decrease in demand and further price declines. However, the situation is still evolving, and the state of the futures market must also be analyzed before making definitive conclusions.
FAQs
What is the Ethereum exchange reserve metric?
The Ethereum exchange reserve metric tracks the amount of ETH held in exchange wallets. This metric is considered a key indicator of market sentiment and can provide valuable insights into the direction of the market.
What does the recent “death cross” on Ethereum’s price chart indicate?
The recent “death cross” on Ethereum’s price chart, where the 100-day moving average crossed below the 200-day moving average, is a bearish technical signal that suggests a potential decrease in demand and further price declines.
What is the current trading price of Ethereum?
The current trading price of Ethereum is $2,515 at the time of writing.
What is the outlook for Ethereum’s price action?
Renowned crypto analyst CrediBull suggests that Ethereum might sweep the lows into local demand before forming a deviation and potentially moving higher. However, the situation is still evolving, and the market is likely to continue to fluctuate in the short term.
