Ethereum is currently facing selling pressure as the price is frequently rejected at resistance levels and the downward momentum shows that sellers still dominate the market in the short term.
At the time of writing, Ethereum is currently trading at $2,085.13, up 0.02% since it opened early Wednesday in Asian trading.
The tradable supply of ETH is currently dwindling. Over 38 million ETH have been locked up through staking, representing over 31% of the total supply.
Many investors are still willing to wait 50 days to enter staking, while almost no one has exited the system.
The staking return of around 2.7% may be small, but it is enough to show investor confidence in the future of the network. This situation creates a supply and demand imbalance that usually catalyzes large price movements in the crypto market.
Meanwhile, the current selling pressure is partly coming from large hedge funds in the United States who are reducing their long positions. This activity adds to the short-term selling pressure and affects market sentiment.
However, other dealers and asset managers are still maintaining neutral or long positions, indicating that buying interest is still present.
The data shows that short positions are much higher than longs, which would trigger a potential short squeeze if ETH price rises by just $100, a surprising price spike opportunity.
Ethereum is currently in a “disconnection” phase between price and fundamentals. Charts show weakness, but network sentiment remains strong.
With supply increasingly locked in and demand building, patient investors may see a big opportunity if market sentiment starts to turn bullish
