- Ethereum’s liquidation level increased once its price reached the $2,170 mark.
- Its exchange reserve was increasing, but the derivatives metrics looked bullish.
Ethereum’s [ETH] price has once again gained bullish momentum as its price registered an increase in the last 24 hours.
However, a short while ago, the token fell into a critical demand zone. When ETH dropped to that level, did investors choose to sell their holdings, or were they confident in ETH and expected a price hike?
Ethereum reaches a critical demand zone
Ali, a popular crypto analyst, posted a tweet on 13th December highlighting an interesting development.
As per the tweet, ETH has dipped into a crucial demand zone, ranging from $1,934 to $2,160. In that range, over 5.58 million addresses were holding nearly 40 million Ethereum.
#Ethereum has dipped into a crucial demand zone, ranging from $1,934 to $2,160. Here, over 5.58 million addresses are holding nearly 40 million $ETH.
From an on-chain perspective, this is #ETH's most critical support level. For traders, this could be the ideal reloading point to… pic.twitter.com/Qh1P8lQMhk
— Ali (@ali_charts) December 13, 2023
Since ETH was in a critical demand zone, AMBCrypto took a look at Hyblock Capital’s data to see whether there were any sell-offs near those marks.
As per our analysis, when ETH’s price reached the $2,170 mark, the token’s liquidation did increase, as evident from the fluorescent lines. However, soon after that, the token’s price rebounded and went up.
Source: Hyblock Capital
Thanks to that, ETH’s price rallied by more than 4% in the last 24 hours. At the time of writing, ETH was trading at $2,264.32 with a market capitalization of over $272 billion.
However, if ETH has to sustain its bull rally, it does have to cross a few resistance levels. AMBCrypto’s analysis of Ethereum’s liquidation heatmap revealed that it has to cross a crucial resistance level at the $2,300 mark in the near term.
If ETH manages to go above that, then ETH has to encounter another crucial roadblock at $2,450.
Selling pressure on ETH is increasing
However, the viability of ETH maintaining its bull rally looked slim if supply distribution was to be considered.
According to an analysis of CryptoQuant’s data, Ethereum’s exchange reserve was increasing, meaning that selling pressure was high.
Its aSORP was also red, clearly suggesting that more investors were selling at a profit. In the middle of a bull market, it can indicate a market top.
Source: CryptoQuant
Is your portfolio green? Check the ETH Profit Calculator
Nonetheless, Ethereum’s derivatives metrics looked bullish as its taker buy/sell ratio remained green. Additionally, ETH’s funding rate also remained green while its price increased.
This meant that futures investors were buying ETH while its price rose, which can be interpreted as a bullish sign.
Source: CryptoQuant
