The cryptocurrency market saw a slight slump on Wednesday as the price of Bitcoin recoiled from a $108k resistance level, a bearish momentum that also affected the altcoin market with Ethereum failing to maintain its breakout above $4000. This notwithstanding, onchain data analysis indicates that long-term holders remain unfazed by the price volatility, with an observed increase in their Ethereum positions.
At the moment, Ethereum is trading at around $3,877, marking a minor intraday loss of 0.42%. Based on data from Coingecko, Ethereum’s market cap stands at $467.2 billion, with a 24-hour trading volume of $34.8 billion.
Key market indicators to watch include the active accumulation of Ethereum by long-term holders, signaling a potential high-momentum rally in the coming year. Additionally, an ascending trendline in the 4-hour chart and $3,500 serves as key support for the Ethereum price. However, the formation of a double bottom pattern may delay the much-anticipated $4,000 breakout.
Long-term Ethereum holders are demonstrating solid conviction, an indication of a potential price rally as observed in past bull cycles. On-chain data from Ali Charts shows that in previous bull cycles, Ethereum experienced a parabolic price rally when long-term holders shifted into a greed mode.
The current market sentiment appears to be in the early stages of the belief phase, suggesting that Ethereum’s significant price movement could still be on the horizon.
Further underlining this optimism, IntoTheBlock data reveals that long-term Ethereum holders have been consistently increasing their collective balance throughout the year. Approximately 110 million ETH is currently held by these investors, indicating unwavering confidence and a continued accumulation trend.
Despite Ethereum’s struggle to surpass the $4,000 mark in the face of Bitcoin’s recent high, the 4-hour chart reveals two long-wick rejection candles at the overhead trendline in the past two weeks, signaling significant selling pressure.
A bearish reversal from $4k could see the altcoin’s price fall by 10%, down to $3,500, where it could find support at the 50-day Exponential Moving Average. A potential breakdown could accelerate selling pressure, leading to a significant correction.
However, given the bullish sentiment in the broader market, the Ethereum price is likely to hold the $3,500 mark or regain bullish momentum at the support trendline. A flip above $4,000 could trigger a fresh all-time-high rally for Ethereum, potentially leading to parabolic growth.
