Whale Profit-Taking Slows Ethereum’s $4K Push – What’s Next?

Key Points

• Large holder outflows of Ethereum have outperformed inflows, indicating potential sell pressure.
• Ethereum’s bearish divergence with the RSI suggests a possible pullback.
• Ethereum holders have been hopeful for a rally above $4,000 by the end of 2024, but recent signs suggest a potential pullback may be on the horizon.

Large Holder Flows and Whale Activity

Despite Ethereum maintaining its bullish momentum throughout November, there are signs of increasing sell pressure from large holders. This isn’t entirely unexpected, as the strong upward momentum seems to be slowing down as the market adjusts.

Data from IntoTheBlock shows a significant peak in large holder outflows, reaching 647,220 ETH on December 3rd. This suggests that the sell-off pressure from Ethereum’s whale investors is outweighing the demand, which is a sign of bearish momentum.

ETF Inflows and Spot Flows

Ethereum’s ETF inflows have been positive this week, but there has been a noticeable decline compared to the previous week. On December 3rd, Ethereum ETFs saw inflows of $132.6 million, a substantial increase from $24.2 million the previous day. However, this figure is still far below the $332.9 million recorded the week before, highlighting a slowdown in bullish demand.

It’s important to note that demand can fluctuate daily, and while the data shows a decrease in ETF inflows, it doesn’t necessarily reflect a long-term trend. The data does, however, suggest that Ethereum’s bullish momentum may be slowing down over the weekend.

On the flip side, spot flows have been more positive. They peaked at $285 million in the last 24 hours and were at $252.69 million on November 3rd. These positive spot flows are in line with Ethereum’s recent price action and have contributed to its recovery in the past two days.

Current Price Action and Potential Pullback

As of now, Ethereum is trading at $3,731, showing signs of recovery from the initial sell-off at the beginning of the week. However, the bearish divergence with the Relative Strength Index (RSI) suggests that a pullback could be on the horizon. This could result in a price dip toward the recent support level of $3,050.

Ethereum holders who were hopeful for a rally to $4,000 by the end of 2024 may need to prepare for potential short-term volatility. While Ethereum’s long-term prospects remain strong, the short-term outlook appears to be under pressure due to decreasing whale demand and technical indicators signaling a possible correction.

Conclusion

While Ethereum continues to show resilience in the face of sell pressure, several factors are suggesting that a pullback could be imminent. Large holder outflows, reduced ETF inflows, and a bearish RSI divergence all point toward a possible dip in Ethereum’s price. Investors should monitor these developments closely, as they may affect Ethereum’s trajectory in the near future.