Ethereum: A rally in whale stocks may not help ETH investors.  Here’s why…

Ethereum: A rally in whale stocks may not help ETH investors. Here’s why…

  • Ethereum whales add more ETH coins to their holdings
  • The current market outlook may prevent the accumulation of whales from positively influencing prices

During the November 21 intraday trading session, data from on-chain analytics Saniment revealed a significant increase in Ethereum [ETH] whale possessions. ETH whales that held between $10.9 million and $1.09 billion ETH added 947,940 ETH, which was worth $1.03 billion at the current price.

Read Ethereum [ETH] price prediction 2023-2024

Santiment noted that the addition represented the fifth “biggest single-day addition in the past year”. In the last four instances, the price of ETH has risen over the ensuing three days.

At press time, ETH traded hands at $1,100.34. The major altcoin last traded at these levels in July.

Does ETH look well prepared for a rally?

According to data from CoinMarketCap, the price of ETH has fallen by 2% in the past 24 hours. During the same period, trading volume decreased by 14%. This created a price/volume divergence in trades that is usually present in a bear market.

The divergence indicated the exhaustion of buyers and the low conviction of ETH holders, who may not be sure of a possible positive price rise in the short term. For the predicted rally to occur, conviction must rise, as this would drive more demand into the market, driving the price of the alt higher.

Along with a price/trading volume divergence hampering the predicted price rise, there has also been a shortfall in new demand for ETH. According to data from Santiment, since November 13, the number of new addresses created daily on the ETH network has decreased by 28% at press time. As of November 21, 77,405 new addresses have been created on the EPF network.

Additionally, the number of unique addresses traded daily with ETH has since declined by 41% in the past four days, data from Santiment showed. As of this writing, 58,039 addresses are exchanging the main alt.

Source: Santiment

The outlook looks bearish in the short term

An assessment of ETH’s price performance on a daily chart revealed that sellers were in control of the market.

A look at its Exponential Moving Average (EMA) position confirmed this. At the time of writing, the 20 EMA (blue) was below the 50 EMA (yellow) line. This shows that ETH sales have exceeded its accumulation.

This was confirmed by his Directional Movement Index (DMI). The strength of the sellers (red) at 34.56 was solidly ahead of the buyers (green) at 8.52.

The asset’s Relative Strength Index (RSI) edged closer to being oversold at press time. It was positioned in a downtrend at 33.61. The dynamic line (green) of the Chaikin Money Flow (CMF) also rested below the middle line to show a negative value of -0.17.

This showed that buying pressure had eased significantly at press time, and that a positive reversal in conviction is needed for that to change.

Source: Trading View

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