The journey of Ethereum towards the much-anticipated $5,000 mark may encounter further obstacles as on-chain data indicates potential challenges.
Analysis reveals that long-term holders (LTHs) of ETH are currently selling off their holdings, which could introduce sell pressure affecting the market. Concurrently, a lingering bearish attitude among futures traders complicates matters further, putting its short-term upward potential in jeopardy.
Profit-Taking by Long-Term Holders Halts ETH’s Breakout
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ETH’s recent month-long price stabilization has offered a chance for long-term holders (LTHs) to secure profits following the altcoin’s late-August ascent to an all-time high.
This tendency is reflected in the coin’s Liveliness metric, which, according to Glassnode, has reached a year-to-date high of 0.704.
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The Liveliness of an asset tracks the dynamics of previously dormant tokens by assessing the ratio of an asset’s destroyed coin days to its total coin days accrued. A decrease suggests LTHs are withdrawing their assets from exchanges, indicating accumulation.
Conversely, an increase in Liveliness indicates that more dormant coins are being sold, signaling intensified profit-taking by LTHs.
As a result, the rise in ETH’s Liveliness indicates that LTHs are opting to realize profits rather than holding out for more significant gains. This selling pressure may hinder ETH’s capacity to achieve a definitive breakout towards the $5,000 mark shortly.
Futures Traders Sustain Sell-Side Pressure
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The ongoing bearish sentiment in the derivatives market exacerbates this pressure. Data from CryptoQuant indicates that ETH’s taker buy-sell ratio has remained predominantly in the red for much of the past month, underscoring continued exits among futures traders.
An asset’s taker buy-sell ratio gauges the balance between buy and sell volumes in the futures market. A ratio exceeding one reflects stronger buy activity, while a figure below one indicates heightened sell-side pressure.
In the case of ETH, values below one have persisted for over a month, highlighting a continued bearish stance among traders, which may further postpone ETH’s ascent to $5,000.
$5,000 Breakout Relies on Demand Revival
Currently, the leading altcoin is priced at $4,542, remaining above the support threshold at $4,211. Should bearish sentiment intensify and selloffs persist, it may revisit this support level.
This could potentially lead to a more significant drop to $3,626 if the support fails to hold.
However, a revival in demand for ETH could overturn this bearish outlook. In such a scenario, the coin’s price might aim to breach the resistance at $4,957. If successful, it could lead to new highs above $5,000.
