The amount of Ethereum [ETH] available on exchanges has reached its lowest point since 2016, indicating a scarcity in liquidity that points towards a positive medium-term outlook.
As the selling pressure decreases and accumulation increases, one may wonder if ETH will be able to surpass the critical resistance level of $3.5K in the near future.
Important Technical Indicators Show Signs of Bullishness
Although there are no indications of overheating, Ethereum is currently 32% below its highest point post-election at $4,016, with a pattern of forming four successive lower lows.
Presently, the RSI has hit its lowest point, and a bullish MACD crossover is beginning to form – hinting that ETH’s consolidation phase might be gearing up for a breakthrough.
However, past trends advise caution, as previous attempts to break key resistance levels were met with difficulties due to the struggle of demand against selling pressure.
Nonetheless, Ethereum’s exchange supply has dropped to a record low of 8.2 million ETH, the lowest in nine years.
With diminishing liquidity and a possible surge in demand, the stage is set for a potential shock in supply – one that could propel ETH past significant resistance levels.
Determining Ethereum’s Next Major Barrier
Ethereum is currently facing a crucial hurdle at $2,785, where around 8.10 million addresses would become profitable, opening the door to a possible $20 billion in sell pressure.
Even though spot reserves have hit a low point, indicating accumulation, investors have transferred over 2 million ETH to exchanges in February, sparking concerns about increasing selling pressure.
Weaker interest from U.S. and Korean investors adds to the risk of a decrease in upward momentum, possibly leading to a scenario where leveraged long positions in the futures market are trapped.
If demand fails to rise, Ethereum might experience a retreat towards $2,264, where a substantial amount of 62.38 million ETH is concentrated.