TLDR
- Ethereum price recovered from $2,460 support to trade near $2,550 but faces resistance at the $2,600 level
- A whale recently deposited 10,195 ETH tokens worth $25.67 million to Kraken exchange, signaling potential selling pressure
- Technical analysis shows ETH broke below a bullish trend line at $2,555 and struggles to maintain momentum above $2,500
- Retail trading activity remains low compared to previous market tops, suggesting the bullish phase may still be early
- Spot market data shows buyers have remained dominant in May despite the recent pullback from $2,800
Ethereum price has entered a correction phase after testing the $2,800 level, but market data suggests the pullback may be limited in scope.
The cryptocurrency found support at $2,460 and began a fresh increase toward higher levels. ETH managed to recover above the $2,500 and $2,520 resistance zones during this upward move.
Bulls pushed the price above the 23.6% Fibonacci retracement level of the downward move from the $2,730 swing high to the $2,463 low. However, bears became active near the $2,600 resistance zone.
The price failed to clear the $2,600 level and reacted to the downside. Ethereum now trades near $2,550 and the 100-hourly Simple Moving Average.
Technical analysis reveals a break below a connecting bullish trend line with support at $2,555 on the hourly chart. This development suggests weakening momentum in the short term.
ETH Price
Whale Activity Signals Potential Selling Pressure
Recent on-chain data shows an ETH whale wallet deposited 10,195 tokens worth $25.67 million to the Kraken exchange. Such moves typically indicate an intent to sell and can create downward pressure on prices.
The correction from $2,800 was influenced by a rise in Taker Sell Volume. This metric tracks the volume of market sell orders and provides insight into selling pressure.
Despite this selling activity, longer-term data shows buyers have remained dominant over extended periods. The spot taker CVD metric, which tracks the cumulative difference between market buy and sell volume over three months, remained green and rising in May.
This indicates that taker buy orders were dominant throughout the month. The data suggests that despite cooling volume, buyers still controlled the market during the recent rally.
Low Retail Activity Suggests Early Bull Phase
Analysis of retail trading patterns shows the recent recovery to $2,800 did not trigger the intense activity typically seen at market tops. Historical data from March 2024 and December shows that local tops were accompanied by heightened retail trading activity.
The absence of this frenzied activity during the recent rally suggests Ethereum may still be in the early stages of its bullish phase. The quick recovery from $1,700 to $2,800 since April was accompanied by reduced trading volume.
Profit-taking activity has not increased dramatically, which analysts view as a positive development for future price action.
Looking at resistance levels, ETH could face initial resistance near $2,580. The next key resistance sits at $2,600, close to the 50% Fibonacci retracement level.
If bulls can push through these levels, the first major resistance appears near $2,650. A clear move above this zone might send the price toward $2,720 resistance.
On the downside, initial support sits near $2,550. The first major support zone is located at $2,520.
A move below $2,520 support might push the price back toward the $2,460 support level. Further losses could target the $2,420 support zone.
Current market conditions show mixed signals, with technical indicators suggesting potential weakness while fundamental metrics indicate underlying strength in buyer demand throughout May.
