Ethereum’s (ETH) price has had a disappointing trajectory. Despite major bullish events in the last month, the altcoin has barely moved.
ETH is now facing a critical resistance level, but flipping it would mean excessive profits, which is also bad for the price.
Ethereum in a Rut
Ethereum’s price could rally and chart a new all-time high above $4,800, but it would warrant considerable conviction from investors. The possibility of this happening is slightly weak at the moment.
This is because any rally would push the total supply of profit upwards, which is a cause for concern. Once this metric crosses the threshold of 95%, a market top is formed, which is a bearish occurrence for the asset.
A market top is the highest point of a security or index before a significant decline. It often signals the end of a bullish trend and the beginning of a downward movement. The total ETH supply in profit is currently at 93%, and a surge in price would translate to a surge in this metric, leading to a decline.
The decline is the result of potential selling that may occur as profit-seekers move to secure their gains. This is concerningly high in the case of ETH.
Observing the active addresses by profitability reveals that about 30% of the participants are in profit. Their dominance hints at profit-taking, which results in a price decline.
Read More: Who Is Vitalik Buterin? An In-Depth Look at Ethereum’s Co-Founder
This is also the case with ETH, which is threatening a price decline.
ETH Price Prediction: Breaking the Barrier
Ethereum’s price has been stuck under the 61.8% Fibonacci Retracement line at $3,829 for three weeks now. This line is also known as the bull market support floor, and retaining it will enable a rise.
ETH has already failed to secure it as support once, and with the rising possibility of the aforementioned selling, another breach could fail, too. Consequently, the altcoin might witness either consolidation or a drawdown to $3,582, which aligns with the 50% Fib level.
Read More: Ethereum (ETH) Price Prediction 2024/2025/2030
However, if the 61.8% Fib line is flipped into a support floor, Ethereum’s price could observe a rise. This would enable ETH to breach the resistance at $4,000, climb to $4,100, and further invalidate the bearish thesis.
Disclaimer
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