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Here’s Why Ethereum Price Faces Sub-$3k Correction
The Ethereum price has been experiencing a remarkable rally, breaking above the $3,500 mark and testing the resistance level. However, onchain data suggests that institutional players may be preparing for a significant sell-off, which could lead to a correction below $3,000.
According to Lookonchain, Cumberland, a well-known trading firm, has deposited over 16,200 ETH (valued at approximately $55 million) into Coinbase in a series of transactions on December 24. The transaction breakdown shows multiple deposits, including 5,000 ETH, 5,601 ETH, and 5,600 ETH. This massive transfer of assets to a centralized exchange raises concerns about potential selling pressure.
Another onchain data point reveals that Nexo has deposited an astonishing total of 101,756 ETH (approximately $380 million) into Binance since December 2. The average price of these deposits is reported at $3,737 per ETH. Moreover, Nexo added another 7,495 ETH (valued at $25 million) to Binance on the same day. This significant movement of assets into a centralized exchange suggests that major institutions might be positioned to sell or trade these assets, potentially accelerating a bearish market sentiment.
Furthermore, Ethereum’s price action has formed a double-top pattern, which is commonly seen as a signal for intense overhead supply. The breakdown of this neckline at $3,500 serves as a warning sign for investors to reconsider their positions. The chart setup indicates that if the daily chart price action fails to show sustainability above $3,500, it could plunge 16.8% to find support at $2,900.
While the Ethereum price has shown resilience in the face of resistance, the current market dynamics do not seem conducive for a breakout above this level. In fact, the price action has formed a bearish breakdown of the neckline, which is a crucial signal to monitor.
Source: www.cryptonewsz.com
