The recent reduction in Ethereum (ETH) holdings has generated deep interest in the crypto community. According to data shared by the on-chain analytics platform Glassnode, the number of addresses holding 1,000 ETH has reached its lowest level in five years. This decrease has brought the number of addresses with this amount in their portfolio to just 6,082. In this article, we will explore the implications of this trend and how it could affect the price of ETH in the short and long term.
📉 #Ethereum $ETH Number of Addresses Holding 1k+ Coins just reached a 5-year low of 6,082
— glassnode alerts (@glassnodealerts) September 19, 2023
View metric:https://t.co/iDNXAbbLRt pic.twitter.com/gmGccZb3e5
Selling long-term holders
An initial interpretation of this data suggests that some of the long-term holders of ETH have been selling their assets. This sell-off activity puts Ethereum in a vulnerable position, exposed to the possibility of a significant decline in its price. In addition to long-term investors, another factor has contributed to putting downward pressure on the value of ETH.
The unexpected sale of an inactive wallet
Lookonchain, a Web3 data analysis tool, revealed that a four-year-old dormant wallet sold all of its ETH, for a total of $4.81 million. This sudden transaction has generated considerable selling pressure in the Ethereum market in a matter of hours, leaving the altcoin in a delicate situation.
The resilience of ETH
Despite intense selling pressure, Ethereum has shown some resilience, maintaining its price around $1,600. However, there is a possibility that the ETH price could fall below this level, as previous Coin Edition reports have noted. From a technical perspective, Ethereum’s momentum appears to be in a constant back-and-forth between bulls and bears.
The battle between bulls and bears
At the time of writing, the bears appear to be in greater control as Ethereum faced a rejection at the $1,659 level. This rejection led to a drop in the price of ETH to $1,622, which had previously acted as a critical support zone for the cryptocurrency. Furthermore, the Directional Movement Index (DMI) indicates that the presence of bulls could be on the verge of becoming completely extinct.
Technical indicators and the future of ETH
The DMI is showing a bearish trend, with the -DMI at 21.93 and the +DMI at 21.91. Although these values are close, the direction of the -DMI points upward, while the +DMI faces a downward trend. This divergence is a factor to consider in Ethereum’s prospects.
The ADX Indicator and the MACD
The Average Direction Index (ADX), which stands at 14.64, suggests that the bears may still face buying pressure if they aim for ETH to fall below $1,600. Meanwhile, the MACD indicator is showing a significant divergence, indicating increasing downward momentum for Ethereum.
To end…
The decline in Ethereum holdings and sudden selling pressure coming from a dormant wallet have put ETH in a delicate position. Although its price remains around $1,600, technical indicators suggest that it could face an uncertain future, with the possibility of falling below this level. Investors and cryptocurrency market watchers will need to keep an eye on Ethereum’s next moves as it faces bear influence in the near term.
