Key Points
- Ethereum (ETH) price has experienced a 15% drop, and may face a short-term correction to $3K.
- Despite the correction, there is aggressive accumulation by whale investors.
Ethereum (ETH) has faced a significant resistance level of roughly $4,050. Over the past two weeks, the price of the cryptocurrency has dropped by more than 15%, trading at approximately $3,381 on December 27 during the mid-London session.
This large-cap altcoin, which has a fully diluted valuation of about $407 billion, has seen the worst weekly losses since the re-election of President-elect Donald Trump in the United States.
Ethereum’s Bearish Continuation Pattern
In the daily time frame, Ethereum’s price has formed a bearish continuation pattern. This could trigger a 10% drop towards the support level of about $3K in the near term. Furthermore, Ethereum’s price has consistently closed below the 50-day Moving Average (MA), amid the ongoing crypto correction.
Ethereum’s fear and greed index is at about 57%, indicating existing greed from traders. This suggests a further correction is highly likely in the near term. However, Ethereum’s price has been forming a macro rising trend in the long haul, indicating a bullish first quarter of 2025.
Potential Bullish Pattern
The ETH/BTC pair has been forming a potential bullish pattern, after being trapped in a bearish trend for the past three years. Ethereum’s price recently broke out of a multi-year consolidation after closing on a feeling logarithmic trend. As a result, it is advisable to closely monitor a possible bullish continuation pattern toward $5K in the near term.
Aggressive Accumulation by Whales
On-chain data analysis shows that the overall supply of Ether on centralized exchanges has declined by more than 450K in the past four weeks. It is currently around 15.39 million. Notably, the demand for Ethereum has sharply increased amid the rising calls for a parabolic altseason.
US spot Ether ETFs and individual whale investors have been the biggest buyers of Ethereum recently. The US spot Ether ETFs have registered a cumulative total net inflow of about $2.63 billion, holding total net assets of over $12 billion. Fidelity’s FETH and BlackRock’s ETHA led the US spot Ether ETFs with a daily net cash inflow of about $117 million.
None of the US spot Ether ETF issuers registered a net cash outflow on Thursday, indicating bullish sentiment from long-term investors. The rising demand for Ether from institutional investors has coincided with the notable cash inflows to the ETH Futures Open Interest (OI), which is currently around $23 billion, the highest since the inception of Ethereum.
