Ethereum’s recent rally may be losing momentum as exchange inflows are rising and derivatives data points to softening market support.
Almost 100,000 ETH, or about $250 million, have been deposited in two substantial waves in the vinanence, according to an analysis by encrypted contributor Amr Taha on July 1. These deposits usually show larger replacement reserves, but changing market sentiment can put sales pressure on them.
Taha also observed a growing gap between Ethereum spot prices and open interest in vinance. Since June 26th, ETH has shown stable purchases in the spot market, reaching three consecutive local highs above $2,500.
However, Binance Open Interest has been behind, winning a series of low highs below $5.6 billion. This suggests that fewer traders are opening new positions. This could be a sign of caution or uncertainty regarding the strength of movement.
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Continuing reductions in the US Federal Reserve’s net liquidity is another factor that could increase uncertainty. Over the past few weeks, liquidity has dropped from around $6.2 trillion to $5.84 trillion.
Decreasing liquidity tends to limit risk taking by reducing access to capital in both traditional and crypto markets. The benefits can be limited in the short term, unless Ethereum sees high demand from buyers ready to absorb this environment.
Ethereum traded at $2,451 at press, down 0.5% on the last day. The price is approaching $2,455, which serves as a resistance from the previous week, marking a simple 20-day moving average.
Technical indicators such as the tightening bollinger band and the relative strength index of 48.9 indicate that the market is in a consolidation stage with little volatility and no clear directional bias.
ETH price analysis. Credit: crypto.news
Oscillators like stochastic RSI are approaching the realm of over-acquisition, which limits the possibility of short-term invertedness, but momentum and MACD indicators display mild bullish signals.
The long-term average exceeds current prices, suggesting a wider decline. Short-term moving averages, such as the 10- and 50-day index averages, provide little support.
The next upward target is a Bollinger band that costs around $2,622 if Ethereum buys pressure returns and increases volumes over $2,500 and raises open interest. If current support gives way and exchange inflows outweigh demand, the price could retest the lower band to around $2,287, increasing the risk of deeper pullbacks.
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