Key Points
- Ethereum’s recent uptrend shows signs of weakening as it struggles to maintain levels above $2,800.
- Despite low exchange-supply ratio, large ETH holders appear to be cashing in profits.
Ethereum [ETH] experienced a significant surge on 24th August, reaching a multi-week high above $2,800. However, it has since failed to hold these levels, with the price dropping by 0.6% to trade at $2,742.
Signs of a Weakening Uptrend
Large ETH holders, known as whales, seem to be cashing in on their profits. One such whale recently transferred $34 million worth of ETH to Coinbase.
Trading volumes for Ethereum have dropped by 18%, according to CoinMarketCap data. The decrease in volumes aligns with the slight drop in price, indicating a lack of buyer support for the uptrend.
The Relative Strength Index (RSI) is currently at 42, indicating that sellers have entered the market. The RSI line has been forming lower lows on the hourly chart, further indicating a weakening uptrend.
Bearish Momentum and Exchange Reserves
The Directional Movement Indicators (DMI) also suggest a bearish trend. However, the Average Directional Index (red) is at 14, indicating that the bearish trend is weak.
If the bearish momentum continues, ETH may drop lower to test the 0% Fibonacci level ($2,718). Failure to maintain this price could lead to further drops.
Despite the bearish momentum, Ethereum exchange reserves have dropped to record lows. This suggests that fewer investors are holding ETH on exchanges, reducing short-term selling pressure.
The Ethereum exchange supply ratio has also decreased significantly this month, indicating that traders are less likely to sell at current prices.
Ethereum’s open interest has increased to over $11.5 billion, up from below $10 billion in early August. However, with the long/short ratio at 0.92, more traders are opening short positions on ETH, anticipating a price drop.
