This $104M Signal saw Ethereum Price outperform BTC, SOL -What Next?

Insights:

Ethereum (ETH) bounced back to reclaim the $3,250 territory at mid-day in GMT trading hours April 13 after having tumbled 8% to a 20-day low of $3,223 during the crypto market downturn on Friday. However, on-chain metrics shows that ETH long-term holders are growing reluctant to sell.

Can Ethereum bulls capitalize on the declining sell pressure to trigger an early pricee rebound above $3,500?

Ethereum Long-term Holders Cutting Down Selling Pressure by $104M, Despite Market Dip

Ethereum showed significant resilience on Friday, April 11 as the crypto market suffered a $170 billion market downturn, with over $850 million leveraged crypto derivatives positions liquidated.

While the likes of Solana (SOL), Avalanche (AVAX) and Bitcoin (BTC) all suffered double-digit losses in the region of 15% – 20%, Ethereum only registered a relatively modest 8% downside.

An in-depth analsyis of the underlying on-chain data trends show that long-term holder’s reluctance to sell was pivotal to Ethereum’s resilient performance.

Santiment’s Dormant Circulation (180d) chart below, tracks the number of coins traded on a given day that had been previously held unmoved for up-to 6 months.

During a major price dip, many  investors often panic, flooding the market with fresh supply to exit their long-held positions or attempt to book some profits before prices fall lower.

But according to the chart above, Ethereum long-term holders showed remarkable resilience during the market dip on Friday.

When prices initially retraced from the monthly peak of $3,700 on April 8, long-term holders sold over 55,368 ETH, worth approximately $204 million at the time, which had been previous held unmoved for 180-days.

But during the market dip on Friday April 11, the Dormant supply in Circulation (180d) only hit 31,165 ETH, valued at approximately $101.4 million.

Ethereum long-term investors have reduced their selling pressure by $104 million across the two weekly ETH price extremes. This could have a positive impact on Ethereum price action in the coming days for the following reasons.

• Fatigued ETH Sellers: Ethereum holders have showd remarkable restraint by cutting selling pressure by $104 million even amid intense FUD surrounding global risk asset markets and nearly $850 million crypto derivative contract liquidations.

Essentially this on-chain insight suggests that after prices fell from $3,700 to $3,200 in the last 5-days, majority of ETH holders are now reluctant to sell.

If this $104 million decline in ETH Dormant supply in circulation persists, it could tilt the momentum in bulls favor once the broader markets recover from the shock liquidations.

Ethereum Price Forecast: ETH to Defend $3,200 as Seller Fatigue Sets in

If this $104 million decline in ETH Dormant supply in circulation persists, it could tilt the momentum in bulls favor to avert a downswing below $3,200 in the days ahead.

On the daily chart, the Bollinger band technical indicator also affirms this ETH price forecast. It shows that ETH price is currently trading above the lower-band of $3,194, which implies that the bears could struggle for force further downside.

Ethereum (ETH) Price Forecast |Bollinger Band Indicator, April 13, 2024 | Source: TradingView

This gives the bulls a fair chance to stage an instant rebound toward $3,500 once the broader markets recover from the shock liquidations on Friday.

But, for the bulls to seize control of the markets again, they must first scale the looming sell-wall around $3,460 as depicted by the 20-day SMA price indicator.