Ethereum experienced a significant decline of 10.64% last week, dropping from $3,095 on November 17th to $2,765 by the close of trading on November 21st. A modest rebound of 2.88% has taken place since then. The price chart above clearly shows that this bounce originated from a significant long-term demand zone. This zone (cyan box) extended from $2.4k to $2.7k. The technical significance was notable, as it marked a consolidation phase during May and June. Notably, there was substantial on-chain support, with certain long-term ETH holder cohorts’ realized prices positioned within this range.
Ethereum’s market participants should take note that the prevailing trend continues to be predominantly bearish. A trend reversal from this point seems unlikely — the sentiment remains overwhelmingly bearish. The current demand levels do not support a swift rebound to, and beyond, the $3k threshold. The MVRV ratios for both short-term and long-term holders remained under zero. This indicated that, on average, holders were experiencing losses. These losses marked the highest levels since June, further underscoring the strength of the bearish trend.
The supply distribution chart indicated that wallets holding between 10k and 100k ETH had been on an accumulation spree throughout September and October. At the beginning of November, there was a slight decrease in the number of wallets within this whale cohort. Meanwhile, the wallets holding between 1 and 1,000 Ethereum have experienced a steady decline in numbers since June. The number of the smallest ETH holders has shown a consistent upward trend. The evidence collectively indicated that whales have been accumulating ETH in recent weeks. It seems that the majority of the selling pressure originated from the smaller holder cohorts.
A recent report highlighted an increase in whale buying activity. As the smart money seems to position itself for a recovery, traders are advised to exercise caution. The downtrend has not yet concluded. Investors aiming to scoop up assets at the bottom are engaging in a high-stakes gamble. Clear invalidations for their bullish ideas should be established. A drop in ETH price below $2.4k would serve as this confirmation.