Ethereum (ETH), the second-largest cryptocurrency by market capitalization, faces a potential supply shock as Chinese authorities prepare to potentially sell more than $1.3 billion worth of ETH seized. are. The development comes amid growing market uncertainty, with the crypto fear and greed index plummeting to a seven-day low of 39, indicating a state of fear among traders.
Ethereum price under pressure
As of October 11, 2024, Ethereum is trading at $2,401, down nearly 2% in the past 24 hours. This price decline is consistent with bearish sentiment across the crypto market. However, with the looming threat of a large-scale ETH sale by Chinese authorities, Ethereum holders should be even more concerned.
Unexpected supply overhang
On-chain researcher ErgoBTC reported that 7,000 ETH, part of the 542,000 ETH seized from the PlusToken cryptocurrency Ponzi scheme in 2018, was recently moved to the exchange. The move triggered Ethereum’s foreign exchange reserves to surge to their highest level in three weeks, according to data from CryptoQuant. .
The total number of ETH held on exchanges increased by more than 110,000 tokens in the past 24 hours, reaching the highest level in three weeks. This inflow suggests that selling pressure on ETH could increase as many traders move coins to exchanges for sale.
ETH/USD Technical Analysis: Key Support and Resistance Levels
$2,300 support level
Analysts are closely monitoring the $2,300 support level, which could be important for Ethereum’s near-term price movement. If ETH price reaches this level, it could cause a big pullback. Historically, Ethereum has shown resilience at major support levels, often leading to significant price recoveries.
Experts at the West Island Blog suggest that if it stays above $2,300, it will quickly rise towards $3,000 and could rise to $6,000 in the coming months. If market sentiment improves, this support level could be the starting point for a new bullish trend.
Resistance above $2,420
On the upside, Ethereum is facing resistance near the $2,420 level. On the hourly chart of ETH/USD, a bearish trend line with resistance has formed at this price point. A break above this level could pave the way for further upside, with the next hurdle located near the $2,450 resistance zone.
If Ethereum manages to break above $2,420, it could target the $2,500 resistance zone in the short term. Subsequent resistance levels of note are $2,550 and $2,560.
Ethereum Market Outlook: Volatility and Opportunities
While the potential sale of $1.3 billion worth of ETH by Chinese authorities poses a short-term risk, some analysts see it as a potential buying opportunity. Increased foreign exchange inflows and high trading volumes suggest increased whale activity, which could lead to increased price volatility in the coming days.
Investors and traders should closely monitor key support and resistance levels, as well as on-chain indicators, to weather potential disruptions in the Ethereum market. Despite the current bearish pressure, Ethereum’s long-term outlook remains positive, with many experts expecting a significant rally once the current market uncertainty subsides.
