Ethereum sell signal vs $2.8 billion demand zone: what will happen to the price?

Ethereum has struggled to recover in price recently, mainly due to increased market uncertainty. After multiple failed attempts to move higher, Ethereum’s price is currently facing pressure from both selling activity and a key demand zone.

The demand zone hovering around $1,880 is providing support, but also preventing an immediate price reversal.

Need to sell Ethereum

Ethereum Price Ethereum has issued its first significant sell signal in over two months as the DAA Divergence Indicator shows a worrying trend. This indicator compares Daily Active Addresses (DAA) and Ethereum prices and provides insights on investor sentiment.

When DAA starts to fall along with the price of Ethereum, it signals a decline in network activity and suggests increasing selling pressure. This trend is reflected in the appearance of red bars, indicating increasing bearish sentiment.

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Ethereum price DAA divergence. Source: Sentiment

A decline in DAA suggests that fewer users are joining the network, which typically leads to a weakening of the market structure. When both DAA and price fall at the same time, it often indicates that Ethereum’s bullish momentum has stalled and a price decline may be imminent.

Interestingly, while the increased selling pressure around Ethereum may seem negative at first glance, it could be the catalyst for a much-needed price reversal. Ethereum’s MVRV (market value to realized value) price range indicates: $ETH A critical moment is approaching. MVRV below 0.8 historically indicates that the altcoin is undervalued. $ETH I plan on rebounding.

Ethereum has been trading below its extreme lows for about 5% of the trading day, and the MVRV signal is often a harbinger of a price reversal. However, Ethereum requires more than just market signals. We need investor confidence to push this forward. Current selling pressure may be limiting this momentum, but the situation remains fluid. If an investor holds a position without selling it, $ETH We could see a price rebound soon.

Ethereum MVRV Price Range. Source: Glassnode

Investor is blocking $ETH recovery

The most important support level that Ethereum currently faces is the $1,880 demand zone formed by: $ETH Cumulative total of 1.406 million holders $ETH Valued at over $2.81 billion. This price range is an important level, and any price decline into this area will be met by a strong rebound. Ethereum price has been consistently supported at this level, indicating that investors are reluctant to sell below this level.

If the price of Ethereum falls to this demand zone again, it will likely be under buying pressure. This will prevent further downward price movements. However, if selling activity intensifies and Ethereum falls below $1,880, it could trigger a steeper decline.

Ethereum CBD heatmap. Source: Glassnode

While such a decline would likely trigger the reversal Ethereum needs, it could also leave the cryptocurrency vulnerable to even lower levels. The balance of this demand zone is critical in determining Ethereum’s immediate future.

$ETH There is some resistance to the price

Ethereum is currently trading at $1,998 and is facing resistance along the downtrend line. This bearish momentum could constrain Ethereum’s price in the short term, making it difficult for it to start rising. As a result, prices are likely to remain subdued, with limited chances of an immediate recovery.

Ethereum could fall towards the support at $1,902 as bearish factors persist. Below this level, the price may fall further and reach below $1,816. Such a move would be necessary for Ethereum to trigger the reversal needed to regain upward momentum.

Alternatively, if investor sentiment improves and macroeconomic conditions improve, Ethereum could break out of the current downtrend line. A break above this resistance will push Ethereum closer to the $2,165 level. That would invalidate the current bearish outlook and open the door for potential price increases.

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