Ethereum Dumps, ETH Bulls Rejected from $4.2k
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The Ethereum price is trading below $4k, posting double-digit losses on December 28. Following those sharp losses, the trading community is apprehensive, staying on the sidelines even though they remain hopeful of price recovery.
A Reason to be Bullish
Fundamentally, there are more positives to keep up traders going. For example, following the activation of the Arrow Glacier upgrade early this month, mining Ethereum is economical.
The difficulty bomb has been postponed to allow for quick merge and transition to Eth 2, which activates staking. Combined with the earlier upgrade with EIP 1559, ETH coins are now scarcer. Over time, Ethereum believers are confident that ETH would be a better store of value than Bitcoin and gold.
Apart from this, traders are looking at the low cost of transactions in Ethereum at the moment. The increasing adoption of layer-2 solutions such as Arbitrum is lifting the demand away from the Ethereum mainnet to off-chain layers, easing Gas fees. The cost of transacting is in single digits, a net positive for the blockchain.
Are ETH Whales Selling?
All the same, the dump of ETH/USDT prices has been consequential. For instance, on-chain data reveals that there has been a significant reduction in the number of holders.
Those with at least 1k ETH in their wallets, GlassNode shows, are now at a four-year low at 6,292 by December 27. The reduction in the number of whales could be due to liquidation in response to sliding. This vote of no confidence on price could trigger a market-wide dump, further pressing ETH below $4k.
Ethereum Price Analysis
The ETH price is down five percent from this week’s highs—a bearish development. A glance at the daily chart of ETHUSDT points to weakness.
The bearish engulfing bar of December 28 is with high trading volumes, retracing from the $4.2k resistance line and the middle BB. This move saw ETH prices snap back to the primary bearish trend.
As a result, aggressive traders could trade with the primary trend, unloading on pullbacks while targeting December 2021 lows of around $3650. Notably, the drawdown of December 28 is wide-ranging and marked by high trading volumes, sliding lower in line with the December 4 bear bar.
Technical charts courtesy of Trading View
Disclaimer: Opinions expressed are not investment advice. Do your research.
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