Ethereum is currently trading at approximately $2,420.48, experiencing a pullback of 3.60% in the last 24 hours. This decline follows a robust rally throughout August, which saw ETH surpass the $2,400 mark for the first time in months.
The recent price action seems to be influenced by profit-taking among investors. Ethereum has recently climbed above its average on-chain cost basis of $2,306, a level that typically triggers selling from holders who were previously at a loss.
On-chain metrics support this observation. Ethereum’s Spent Output Profit Ratio (SOPR) has remained above 1 for the past week, indicating that most ETH transacted on-chain during this time has been sold at a profit.
Despite this profit-taking, demand for Ethereum ETFs has remained robust. On August 27, US spot Ethereum ETFs recorded a substantial $234.51 million in net inflows, following notable inflows of $192.35 million and $179.80 million on the preceding days. This nine-day inflow streak has pushed weekly ETF totals to $722.24 million, marking the strongest weekly performance for Ethereum funds in nearly ten months. Cumulatively, total net inflows now stand at $12.87 billion, with assets under management reaching $15.57 billion.
Whale Activity at $2,500 Resistance
In a noteworthy development, a crypto whale recently made headlines by purchasing 5,425 ETH for $13.55 million at an average price of $2,498, right at the critical $2,500 resistance level. This transaction has garnered attention from traders, as many are keenly observing whether buyers can push the price back above this pivotal threshold.
Currently, ETH is trading below this entry price, raising questions about whether it can regain its footing above $2,500. Holding this level is crucial for maintaining the current bullish sentiment.
Analyst Daan Crypto Trades highlighted the significance of ETH’s price action, noting that the cryptocurrency has registered a higher high on the weekly chart, which enhances the overall market structure. However, he cautioned that a drop below $2,300 would be detrimental for bullish investors.
Adding to the market dynamics, stablecoin inflows have injected broader liquidity into the crypto space, with over $4.1 billion entering the market in the past two weeks, according to DefiLlama data.
On-Chain Activity Lags Behind Price Movements
Despite the price surge, on-chain activity has not kept pace. Both transaction counts and active addresses have declined over the past week, suggesting that the recent rally has not yet been corroborated by a growth in actual usage.
The derivatives markets are also showing caution. Open interest has not rebounded significantly since a recent leverage flush and short-liquidation event, with Ethereum witnessing $97.3 million in liquidations in the past 24 hours, predominantly from long positions.
The 14-day RSI currently sits at 69, hovering just below overbought territory, while the Stochastic Oscillator is at 81, indicating stretched short-term conditions. Ethereum’s open interest has surpassed $32 billion, with trading volume exceeding $100 billion, according to data from Coinglass.
As the market navigates these developments, key levels to watch remain $2,500 on the upside and $2,146 as the main support below.
