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Why Ethereum (ETH) Might Struggle to Reach $4,000 in the Near Term


Ethereum (ETH) price bounced back this week from the lows of $3,100, reigniting hopes of new highs for the altcoin.

However, the inclination of ETH investors toward realizing profits might impede this process.

Ethereum Price Rise Warrants Restraint From Investors

Ethereum’s price increased to $3,642 at the time of writing, and in doing so, it brought investors back on the network. However, their actions are not in line with the expectations.

The transfer of ETH from one address to the other shows that the current price is higher than the last price. This signals the fact that the supply held by such addresses is bearing profits, which will push other investors to engage in the same.

Ethereum Realized Profits.
Ethereum Realized Profits. Source: Santiment

This is an indication of the potential profit booking that might take place, which will accelerate selling among ETH holders.

Read More: How to Invest in Ethereum ETFs?

Ethereum Net Position Change.
Ethereum Net Position Change. Source: Glassnode

Thus, as profits run up, so will selling, which might result in the rally halting soon.

ETH Price Prediction: Count Down to $3,000

Ethereum’s price managed to reclaim the 50- and 100-day Exponential Moving Average (EMA). However, considering the sentiment of profit-taking, ETH may trickle down to find support at $3,336, which coincides with the 100-day EMA.

If this support is lost too, $3,031 is the next likely support floor, which is in confluence with the 23.6% Fibonacci Retracement of $4,626 to $2,539.

ETH/USDT 1-day chart.
ETH/USDT 1-day chart. Source: TradingView

On the other hand, ETH has already flipped the 50% Fibonacci Retracement. It could invalidate the bearish thesis if it sees further growth and flips the 61.8% Fib line into support.

Read More: Ethereum ETF Explained: What It Is and How It Works

The reason is that the latter is considered to be the bull run support floor and tends to reignite the rally. Marked at $3,830, ETH could climb further from here on.

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Conclusion

In conclusion, Ethereum’s price rebounded to $3,642 this week, raising hopes of new highs for the altcoin. However, the propensity of ETH investors to book profits may hinder this upward trend. The movement of ETH from one address to another indicates that current prices are profitable, prompting other investors to follow suit. This potential profit-taking behavior could lead to increased selling among ETH holders, potentially stalling the rally. The price prediction suggests that if ETH falls below $3,336, it may find support at $3,031, followed by a potential climb back up if it maintains support at $3,830. Overall, caution and restraint from investors are advised in light of these developments.

  • bitcoinBitcoin (BTC) $ 66,198.00
  • ethereumEthereum (ETH) $ 3,492.04
  • bnbBNB (BNB) $ 603.79
  • solanaSolana (SOL) $ 144.10
  • xrpXRP (XRP) $ 0.476039
  • cardanoCardano (ADA) $ 0.411842
  • shiba-inuShiba Inu (SHIB) $ 0.000020
  • polkadotPolkadot (DOT) $ 6.16