Ethereum has experienced a 4% drop recently, bringing the altcoin king just under $4,500.
While this short-term decline might worry some traders, the long-term perspective remains optimistic as solid fundamentals and investor behavior indicate resilience ahead.
Ethereum Supply Is Maturing
Ethereum supply has matured considerably, bolstering investor confidence in the asset’s long-term viability. Since the start of the month, the 3-6 month-old supply has increased by 1.76 million ETH, now valued at almost $8 billion. This shows that holders have refrained from liquidating even amid market fluctuations.
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This strong conviction implies that investors expect higher prices and are prepared to endure short-term downturns. By keeping ETH locked up, these holders are decreasing the circulating supply, which may create favorable conditions for upward price movement once demand rebounds. This behavior establishes a bullish foundation for Ethereum’s expansion.
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From a technical viewpoint, Ethereum’s momentum seems mixed in the short term. The Moving Average Convergence Divergence (MACD) indicator is approaching a bearish crossover, suggesting potential short-term downside pressure. This aligns with ETH’s recent drop below the $4,500 mark.
However, broader market indicators remain positive. Even if the MACD confirms a bearish crossover, investor sentiment and maturing supply could facilitate a swift rebound. Such dynamics underscore that any drop is likely to be temporary, setting ETH up for a strong recovery soon after.
ETH Price Could Bounce Back
Ethereum is currently priced at $4,495, just beneath the $4,500 support line. It has not yet closed below this level, so support remains intact.
The maturing supply and bullish long-term outlook suggest that Ethereum could rebound from this support. With fewer coins entering circulation, the altcoin has a structural base for renewed upward momentum towards $4,775, despite short-term volatility.
However, if the price closes below the support level, ETH may fall towards $4,307, jeopardizing the bullish outlook.
