Key Points
- Ethereum [ETH] has been experiencing significant selling pressure, leading to a decline in its value.
- The selling pressure, particularly dominant on Binance, is attributed to a bearish market sentiment.
Selling Pressure on Ethereum
Ethereum [ETH] has been under considerable downward pressure since reaching a recent high of $3746. This has led to a decline in its value to $3,157.
Despite minor gains, Ethereum’s value continues to fall. Currently, it’s trading at $3,196, a 2.17% drop on daily charts. Over the past week and month, Ethereum has also seen a decline by 12.67% and 18.61% respectively.
Market Sentiment and Impact
CryptoQuant attributes this decline across Ethereum’s charts to increased selling pressure. Particularly on Binance, Ethereum has been experiencing strong selling pressure since November 2024.
This is indicated by Ethereum’s Taker Buy/Sell Ratio, which has been negative since November 2024, signifying a higher volume of sell orders than buy orders. The bearish sentiment is further reflected in the ratio dropping to levels unseen since August 2023.
Despite attempts by buyers to take control, sellers have maintained the upper hand, reinforcing the downward momentum. This sustained selling pressure indicates a bearish and cautious market.
However, the rising selling ratio could potentially present a buying opportunity for long-term holders.
Impact on Ethereum’s Price
The strong selling pressure on Ethereum has negatively impacted its price movements. This is evident as Ethereum’s Chaikin Money Flow (CMF) has turned negative, implying that sellers are dominating the market.
The market behavior is further confirmed by a declining Relative Strength Index (RSI), which has dropped to almost oversold territory at 38. This indicates that sellers are controlling the market.
Additionally, Ethereum’s inflow into exchanges has increased significantly over the past week, suggesting more Ethereum is being transferred into exchanges than outflow. This often precedes increased selling pressure as investors tend to sell when they make these transfers.
Ethereum’s Estimated Leverage Ratio (ELR) has also seen a sustained increase over the past month. A rising ELR during a downtrend indicates a bearish sentiment, increasing the risk of a long squeeze. If prices continue to drop, long positions could be liquidated, leading to a long squeeze and further price declines.
If the current market conditions persist, Ethereum could potentially decline to $3,030 and even drop below $3,000 to find support around $2,810. However, if the downtrend exhausts and a reversal emerges, Ethereum could reclaim $3,300.
