Ethereum (ETH) has declined 4.3% over the past week, with the second-largest cryptocurrency by market capitalization currently trading around $2,250 according to CoinMarketCap. This pullback comes on the heels of a strong rally earlier this month that saw ETH surge to yearly high at around $2358.
However, some of the largest Ethereum whales appear to be using this period of consolidation to accumulate more ETH. According to prominent crypto analyst Ali, over 100,000 ETH worth $230 million has been scooped up by major holders over just the past week. As Ali noted on Twitter:
“Some of the largest #Ethereum whales have been on a buying spree, scooping up over 100,000 $ETH in just the past week – that’s a whopping $230 million!”
When large crypto holders and investors accumulate an asset during price declines, it often signals confidence that the asset is undervalued around current levels. If enough whales buy into an asset when it drops, it reduces circulating supply which sets the stage for a potential near-term recovery and relief rally once selling pressure subsides. The actions of whales can be a helpful indicator predicting price pumps.
Examining key technical indicators offers additional insights into Ethereum’s current standing. The Relative Strength Index (RSI) on the daily timeframe is currently around 55. The RSI is an oscillator that measures whether an asset is overbought or oversold, with readings over 70 generally considered overheated and readings under 30 indicating oversold conditions.
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Show more +A daily RSI at 55 shows that ETH has room left to rally before reaching overbought territory again. The monthly RSI is similar at 53, so from a broader perspective Ethereum does not look stretched to the upside or downside right now around $2,250. RSI often balances or regresses back toward the 50 midpoint, implying ETH may trade in this zone for a bit as bulls and bears consolidate between higher support around $2,000 and near-term resistance around $2,500.
So while Ethereum is taking a break after its parabolic spike higher last month, key transactional activity metrics for the network remain strong. Meanwhile whales appear to be buying up ETH to hold through what could be a short-term correction before the next leg higher.
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