- ETH flagged multiple signals indicating it was ripe for a bullish takeover.
- ETH whales could keep selling pressure alive.
Ethereum [ETH] has been in a bearish streak since the second week of July. The mid-August dip added to that negative effect, but now the bulls are showing signs of exhaustion. Recent findings suggest that accumulation is gaining momentum.
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ETH has been providing sideways price action over the past few days, indicating that the bears are taking a break. According to one of the latest Glassnode alerts, store addresses have increased at current levels. The alert reveals that Ethereum addresses holding at least 10 ETH just hit a four-week high.
???? #Ethereum $ETH Number of addresses with more than 10 coins just reached a one-month high of 348,950
The previous one-month high of 348,949 was observed on August 25, 2023
View statistics:https://t.co/6ggy1nLbSD pic.twitter.com/stSzgk9qDJ
— Glassnode Alerts (@glassnodealerts) August 26, 2023
The observation was an indicator that ETH traders were regaining some confidence in the market. This was further supported by the observation that ETH is pouring out of the exchanges. In addition, ETH exchange balances just fell to a multi-year low.
The last time ETH exchanges were at current levels was in 2016. This observation was also beneficial for a long-term bullish outlook, as it confirms a long-term bias.
Source: Glassnode
Despite these findings, ETH bulls remain dovish. This means that the prevailing accumulation levels are not strong enough for a significant rally. This is likely because investors are concerned that the downward trend will continue, especially given the prevailing threat of higher interest rates.
Analysis of the main reasons why the bulls remain inactive
The current demand in the derivatives market underlines the above concerns. Normally, a substantial drop in prices, such as the one we’ve seen recently, attracts significant demand.
However, that price crash was marked by heavy liquidations. The threat of more downsides and subsequent uncertainty resulted in a dip in ETH options open rates.
Source: Glassnode
ETH’s estimated leverage ratio is currently hovering at its lowest level in the past four weeks. It further highlights the point that there is currently little interest in the cryptocurrency.
However, the usual suspects seem to be the ones holding back the possibility of a rally. Addresses in the 1,000 and 10,000 ETH categories have lost some of their coins, adding to the selling pressure.
Source: Glassnode
Read more about ETH price predictions for 2023/2024
Evaluating the possibilities
While the threat of further downtrend is real, traders should note that the next FOMC meeting is scheduled for the second half of September. This means there may be an opportunity for the bulls to gain an edge in the market.
But with the current whale activity, traders should pay attention to when the whales start turning as this could signal the beginning of a bullish relief.