Ethereum Whales Rush to Exchanges, Reversing Bullish TrendNovember 2, 2020
- Ethereum’s price has fallen to a vital support level at $384 from its ascending channel pattern.
- The drop to support was preceded by a massive influx of $3.2 million Ether to exchanges.
- The downtrend in Bitcoin due to uncertainty coming from U.S. elections is adding to the short-term bearish sentiments.
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Ethereum price reached a critical support level for buyers, but a downtrend in Bitcoin and stocks ahead of the U.S. elections projects short-term pain for ETH holders.
Ethereum Reaches Edge of Trend Reversal
Ethereum has fallen to local support from the rising channel at $384, presenting a potential buy signal for ETH.
The midline and resistance of the ascending channel, which forms buyers’ targets, are around $410 and $440, respectively. However, a breakdown points to the invalidation in the recent uptrend.
An unusual spike in the exchange inflows of Ethereum preceded the 3.7% drop on the hourly scale. The negative impulse sent ETH below $380, invalidating the support from the ascending channel.
A breakdown confirmation on the 4-hour chart threatens a drop to lows at $365 and $354.
Pivotal Week for ETH Price
The spent output profit ratio (SOPR) is an on-chain indicator that maps the ratio of ETH price when it is added to an address to the price at which it is spent.
The SOPR ratio oscillates around one; values above one indicate a bull trend, while values below one suggest a negative trend.
Today’s fall in ETH sent SOPR back down to one, presenting a buy signal for continuation in the uptrend.
However, ETH’s coupled price action with Bitcoin suggests growing fear among market participants ahead of the U.S. elections.
While a whale-size exchange inflow seemed to cause the sell-off in Ethereum, Bitcoin dropped 2.1% during the same hour. After logging new yearly highs above $14,000, sellers dominated the BTC price action.
The alpha cryptocurrency has risen over 250% from its lows in March and projects a 93% rise year-to-date. Hence, holders will look to book profits at resistance from 2019 highs.
This week’s trading will be instrumental in deciding the mid-term price trend of the top two cryptocurrencies. Investors and American citizens alike can be sure to expect a lot of volatility in the coming days.
While former Vice President Joe Biden led in the final rounds of polls, the race is still tight, and President incumbent Donald Trump vows to defy polls yet again.
Ethereum is changing hands at $385 on Bitstamp at press time.
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