Ethereum’s price has reached $2,540 – close to $2,500 – but there are signs that the cryptocurrency market is overheating.
The May 21 analysis CryptoQuant contributor ShayanMarkets has reported that Ethereum trading volume is on the rise.ETHThis resistance zone is nearing. This rise in activity is accompanied by a surge in short-term profits. The market will be said to have been “overheating,” It usually means the prices are rising too fast due to speculation, rather than a long-term belief.
In this case, ETH has recovered quickly by 55% over the past 30 days after a 45% decline. decline In Q1, there is a possibility that this rally could be coming to an end or reversing. A short-term correction is possible due to the overheated markets.
The technical data confirms this. At 69, the relative strength index is just above overbought, which often signals a short-term correction. Momentum is positive. All major moving averages are still pointing up, from the 10 day to the 200 day. The price has not stalled, but the underlying support is strong.
If Ethereum is unable to break $2,700, it may retreat to the $2,300–$2,350 range, where support is starting to form. Prices may reach $2,100 if there’s a significant correction. However, the rally can continue if ETH is able to make a strong break above $2700 in high volume.
The big players seem to be preparing for future developments. Data from the on-chain shows that, since April late, big holders (wallets with more than 10,000 Eth) have been increasing. accumulated Over 450,000 ETH. The U.S. Ethereum exchange traded funds saw $108 millions in net flows over the past 30 days, according to SoSoValue data.
A significant catalyst is now approaching. The U.S. Securities and Exchange Commission will likely make its decision on the inclusion of staking In ETH ETFs. It could create a wave of new demand by allowing institutional investors to gain yield on these regulated commodities.
Abraxas Capital in London, an asset manager, is also seeing a demand for ETFs. purchased From May 7 to May 20, 350,703 tokens worth $837 million were exchanged. Ethereum’s long-term story seems to remain intact in spite of short-term pressures, with favorable on-chain trend and growing institutional appetite.
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Source: crypto.news
