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Ethereum price struggled to close above the $4,000 mark for the second time in the past six months. Despite at one point rallying close to this key psychological level, ETH was unable to maintain its position, indicating the need for more convincing buying to push the price above this hurdle.
The failure to maintain the price above $4,000 shows that investors are still hesitant, profit taking is likely to play an important role in stopping the upward momentum.
Ethereum Whales Accumulate
Whale addresses holding between 10,000 and 100,000 ETH have shown strong accumulation over the past five days, purchasing a total of 400K ETH at a value of over $1.5 billion. This notable accumulation shows that major wallet holders continue to believe in Ethereum’s long-term growth.
Whale buying highlights Ethereum’s appeal as an investment. Despite the challenge of surpassing the $4,000 mark, this large-scale accumulation proves that institutional and high-net-worth investors are unaffected by short-term volatility.
The transaction volume distribution reveals that a significant portion of Ethereum transactions are profitable, far outweighing the losing ones. This shows that the majority of Ethereum holders are profitable, increasing the possibility of profit taking. If investors decide to benefit from their profits, this could trigger a short-term sell-off, putting downward pressure on Ethereum’s price.
The preponderance of profitable transactions also indicates that Ethereum has a large base of investors interested in protecting profits. While this reflects healthy market activity, it also means that the risk of a price correction remains high. Profit taking, especially after a strong rally, could hinder Ethereum’s ability to break $4,000 and maintain momentum.
ETH Price Prediction: Decline or Recovery
Ethereum price fell 7% yesterday, currently trading at $3,761. The altcoin king is trying to defend the $3,721 mark as support to avoid further decline. This level is important in determining whether ETH can maintain its upward momentum or face a deeper downturn in the coming days.
Defending the $3,721 support is needed for Ethereum to break above $4,000. If this happens, ETH could reach a new yearly high above $4,093. This potential rally would also pave the way for ETH to set a new record, reinforcing the positive outlook for the altcoin.
However, if Ethereum fails to hold the $3,721 support, it could drop towards $3,524. A deeper decline could take ETH to $3,327. If this happens, the bullish assumption will be invalidated and a larger market correction could take place.
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