Ethereum: Why Eth May Not Stay Above $4,000 for Long

Journalist

• Ethereum traders turned bearish as demand for puts increased.
• The ETH price hardly fluctuated, private investors continued to accumulate ETH.

Ethereum [ETH] saw a massive surge in interest as positive sentiment increased in the crypto sector, led by the approval of the Bitcoin ETF. However, over time, the bullish trend regarding Ethereum seems to have changed.

Increased demand for put options

According to QCP data, ETH risk reversals to the negative indicate increased demand for put options as protection against potential losses from speculative long positions.

Altcoin speculators may also purchase ETH puts to hedge against downward movements in altcoin prices. These trends raise concerns about a possible market correction, especially given the market’s significant leverage.

However, it is assumed that the market will react robustly to any downward movements.

The shift to bearish sentiment could be due to upcoming events that could cause fluctuations in ETH price. One of these would be the upcoming Dencun upgrade, which is scheduled to go live at 13:55 UTC and could impact price and sentiment.

The concern over the upgrade is to be expected as not all upgrades had a positive impact on the ETH price. For example, the Merge update, which was intended to convert Ethereum from a proof-of-work cryptocurrency to a proof-of-stake network, resulted in a massive correction.

These fears, coupled with the uncertainty surrounding the approval of Ethereum ETF applications, may lead to FUD in the market.

Current ETH performance

At press time, ETH was trading at $4,046 and had steadily risen to this price level. Despite some minor corrections, the overall trend remained bullish.

However, the OBV (On Balance Volume) for ETH has decreased significantly in the last few days. This suggests that selling pressure outweighed buying pressure, potentially signaling a weakening trend or an impending price decline.

Growing retail interest

Network growth for ETH has also increased, indicating that new addresses continue to show interest in ETH. At the same time, the total number of ETH battery holders also increased.

Read the [ETH] Ethereum Price Prediction for 2024-25

Looking at addresses in general, it was found that retail investors showed more interest in ETH.

Whales, on the other hand, did not show the same interest and did not accumulate at the same rate.