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Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- Ethereum saw a pullback from just above the long-term resistance at $2300.
- The decline in the number of active addresses indicated a decrease in demand for ETH in the market.
Ethereum [ETH] recorded a significant recovery in its profits earlier in December. While the trend and market structure on the one-day chart remained bullish, some on-chain metrics indicated that selling pressure was increasing.
Ethereum’s deflationary nature should inspire confidence among long-term holders. Estimates of shrinking ETH supply don’t help short-term market sentiment, and a move to $2,000 or lower was still a possibility.
Will the $2130 support hold?
Source: ETH/USDT on TradingView
In early November, ETH shot up to $2130 and then started to retreat. This retracement lasted almost three weeks before the Ethereum bulls regained control.
They needed to conquer the $2000 level as support and managed to do so, then beating the local highs at $2130.
On the way up, ETH took some time to consolidate in the $2030 region before its rapid move northward. This area is highlighted in cyan. Combined with its proximity to the $2000 mark, it should serve as a strong support zone.
The $2019 level was the recent higher low, and a move below would turn the one-day market structure bearish. At the time of writing, the RSI was hovering just above the neutral 50, indicating bullish momentum.
The OBV has also been in an uptrend, although it has seen a dip in recent days.
These statistics indicate caution
Source: Santiment
The age-consumed measure has seen some notable spikes over the past two weeks. The most recent appeared on December 10, when ETH was trading at $2340.
A few days later, the average coin age, which had previously been on a strong upward trend, fell. This suggested that a lot of ETH had been moved between addresses. Combined with age consumed, this indicated a peak in sales pressure.
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This increased selling caused the price of Ethereum to drop towards $2100. It is striking that the number of active addresses started to falter last week. The MVRV ratio also reached a new high.
Holders whose ETH made profits chose to sell their assets to realize some of these gains. Overall, the figures suggested that long-term investors had reason to be concerned.