Ethereum’s price has surged beyond a crucial threshold, surpassing the $3,700 mark amid a bullish rally. As investors witness this uptrend, it becomes imperative to scrutinize the token’s metrics to gauge the sustainability of the rally or anticipate a potential price correction.
Whales are not backing down
Despite a slight dip in the token’s price, the involvement of whales remains conspicuous. According to CoinMarketCap, Ethereum experienced a notable surge of over 6% in the last 24 hours, pushing its value beyond $3,700. As of the latest update, Ethereum is trading at $3,691.87, boasting a market capitalization exceeding $443 billion.
While the token’s price demonstrated resilience, whale activity surrounding Ethereum remained robust. Recent data indicates a consistent upward trajectory in whale transactions, suggesting continued accumulation of the token by significant holders.
Source: Santiment
However, amidst the heightened whale activity, certain metrics hint at the possibility of an impending price correction. A closer examination of CryptoQuant’s data exposes that Ethereum’s net deposits on exchanges are notably elevated compared to the 7-day average, pointing towards potential market adjustments.
Related: Is Ethereum’s Comeback Possible as it Struggles Against BTC?
Elevated deposits can signify heightened selling pressure, and the Korea premium, reflecting red, suggests a prevailing selling sentiment among Korean investors. The derivatives market also painted a bearish picture, with the taker buy/sell ratio turning red, indicating that futures investors were actively selling ETH.
Source: CryptoQuant
What to expect if ETH’s price plummets?
Given the bearish signals from these metrics, it becomes crucial to consult the liquidation heatmap to identify potential support levels. According to Hyblock Capital’s analysis, Ethereum exhibits robust support around the $3.3k mark. Therefore, in the event of a price correction, the token may find stability at this level before potentially embarking on another bullish rally.
Source: Hyblock Capital
To gain insights into ETH’s potential trajectory, an examination of its daily chart was undertaken. Our analysis indicates a heightened likelihood of a price correction, as the token’s Relative Strength Index (RSI) has entered the overbought zone. Additionally, the downtick in the Chaikin Money Flow (CMF) further amplifies the chances of a price decline. Notwithstanding, Ethereum’s MACD remains bullish, showcasing a prevailing bullish momentum in the market.
