Ethereum’s recent recovery rally has hit a snag, with ETH trading sideways as selling pressure increases. This stagnation has been attributed to long-term holders (LTHs) who are moving to lock in profits, a trend that has historically coincided with significant price reversals.
The Long-Term Holder Net Unrealized Profit and Loss (NUPL) metric indicates a troubling pattern: whenever this indicator surpasses the 0.65 level, Ethereum’s price tends to falter. As profit levels become saturated, seasoned investors opt to sell rather than hold, leading to either price stagnation or corrections.
At present, Ethereum mirrors these historical trends. With LTHs cashing in on substantial profits, the current wave of selling is undermining ETH’s upward momentum. Potential buyers appear hesitant to absorb this pressure, making the digital asset vulnerable to a prolonged consolidation phase.
Supporting this trend is the Coin Days Destroyed (CDD) metric, which shows increased activity among LTHs looking to liquidate their holdings. In the last 24 hours, CDD experienced its sharpest spike in two months, underscoring a rise in selling behavior. Such trends often suggest further downside risks, as LTH selling at elevated levels reflects a lack of confidence in an immediate recovery. Without significant buying interest from other investor segments, a cooling period for ETH seems likely.
Currently, Ethereum’s price is around $4,294, maintaining a position above the $4,222 support level. However, the repeated inability to breach the $4,500 mark over recent days has turned it into a crucial resistance barrier for the second-largest cryptocurrency.
In the near term, this indicates that ETH may continue to remain range-bound, oscillating between $4,222 and $4,500 until market conditions either improve or sufficient demand arises to counteract the ongoing sell pressure. Nevertheless, should other investors emerge to purchase ETH that LTHs are offloading, a recovery could still be in the cards. A successful break and conversion of the $4,500 resistance into support would pave the way for ETH to potentially retest the $4,749 level, signaling a possible resumption of its broader bullish trajectory.
