Ethereum (ETH) Bulls Advised to Exercise Caution as More Investors Hasten Profit Realization
After the recent approval of Ethereum exchange-traded funds (ETFs) in the United States, the price of ETH against the US dollar has encountered a significant resistance level at approximately $3,900. This large-cap altcoin, with a fully diluted valuation of around $465 billion and a circulating supply of about 120 million, is on the verge of surging to retest its all-time high.
It is worth noting that both institutional investors and retail traders have shown considerable interest in the Ethereum ecosystem. Additionally, the Ethereum network is recognized for its secure tokenization platform and scalable layer two solutions.
However, the rise of meme coins poses a threat to the bullish sentiment surrounding Ethereum. While buyers of Ethereum struggle to push the price of Ether beyond $3,950, the meme coin industry continues to experience significant growth. Meme coins like Pepe, Floki Inu, and Turbo have propelled the industry to a market capitalization of approximately $66 billion, with a daily average traded volume of nearly $9 billion.
Interestingly, there has been a notable increase in the amount of Ether flowing into exchanges, reaching its highest point since January. This influx of Ether to centralized exchanges, amounting to 140.66k ETH, indicates a selling behavior among investors.
The surge in the meme coin industry has also impacted the supply of Ethereum on exchanges. Despite Ethereum supply on centralized exchanges being at a multi-year low, on-chain data analysis provided by IntoTheBlock reveals that the net inflow to these exchanges has reached its highest level since January.
Looking at the technical perspective, Ethereum’s price against the US dollar is targeting the next liquidity zone between $4,328 and $4,590. This range corresponds to the daily 3.618 and 4.236 Fibonacci Extension levels. However, if the bulls fail to push the price beyond $4,000 in the coming weeks, Ethereum will find strong support at around $3,525.
In conclusion, the approval of Ethereum ETFs in the United States has sparked a rally in ETH’s price. However, the meme coin industry’s growth poses a challenge for Ethereum bulls. Despite this, Ethereum continues to attract institutional investors and retail traders due to its secure tokenization platform and scalable solutions. From a technical standpoint, Ethereum aims to reach the next liquidity zone, but it must surpass the resistance level at $4,000 to achieve this.