The price of Ethereum has experienced slight fluctuations, facing increased sell-off momentum above the $2,500 mark. This pause in Ethereum’s upward trajectory follows Bitcoin’s rally being met with resistance from sellers around the $48,500-$49,500 level. Present on-chain indicators reveal a downtrend in ETH’s price outlook, as transaction fees surge to a monthly peak, along with a rise in netflow.
ETH Price Triggers Bearish Outlook
Based on Coinglass information, the price of ETH saw significant liquidations in the past 24 hours. The data indicates that ETH price movements resulted in total liquidations amounting to $15.5 million, with approximately $13.2 million of these liquidations being carried out on the buy side.
Since the start of February, there’s been a notable rise in Ethereum transaction activity, leading to network gas fees reaching their highest level in several months.
On-chain data shows that the seven-day moving average of on-chain volume on Ethereum blockchain has surged to more than $3.55 billion. This represents a significant growth of over 15% compared to the seven-day moving average of $3.08 billion recorded at the month’s start.
The recent surge in transaction activity over the past few weeks has led to an increase in Ethereum network gas fees. The seven-day moving average of gas fees has risen to a level not observed in several months, exceeding $11.13. This marks the highest point since mid-December 2023.
Rising transaction fees could dampen interest for ETH, as Layer 2 (L2) solutions offer much quicker and more cost-effective alternatives. Such an increase in fees has the potential to decelerate the ongoing recovery pace. Furthermore, the netflow indicator is climbing, entering positive territory.
This indicates that inflows to Ethereum are exceeding outflows, pointing to an accumulation of exchange reserves. This scenario could increase the likelihood of ETH sales in the coming hours, as short-term investors may seek to liquidate their positions near market top.
What’s Next For ETH Price?
Ether surpassed and sustained above the $2,500 resistance level, signaling the completion of a bullish ascending triangle formation. However, buyers are struggling to surge above $2,550. As of writing, ETH price trades at $2,545, surging over 1.7% from yesterday’s rate.
Despite bearish attempts to drag the price below the EMA20 trend line, the bulls successfully defended their position and are currently aiming for a retest of the resistance. The bullish formation aims for a target of $2,700. Should the price surge above the $2,700 level and challenge the resistance line, it would reflect und, positive market sentiment, potentially setting the stage for an advance beyond $3,000.
For bears to challenge the bullish momentum, they would need to drive the price below the moving averages, possibly cornering the more aggressive bull traders. Such a move could trigger a wave of sell-offs, potentially dragging the ETH price down to $2,400-$2,200 support zone.
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