Where is Ethereum headed? The crypto market has been bullish over the last ten days and was even able to break through the $1 trillion market-cap zone sometime last week.
While the crypto market had sluggish bullish movers and even losers during the flash pump last week, it also had extremely bullish participants that registered insane amounts of gains.
One of these participants is ETH, with its 20% increase in price over the last seven days. Ethereum was one of the best-performing assets on the market last week and is second only to Dogecoin, which doubled in a single week.
While the ETH bulls did an excellent job of pushing up against the bears, they ran out of steam around the $1,600 zone. Fears have now started to mount over the cryptocurrency's ability to push through this resistance level and continue its bullish streak over the coming months.
Right after breaking through the $1,600 zone, Ethereum's bullish momentum started to slow down and now appears to be a little more than a trickle compared to last week's stream.
At the time of writing, the cryptocurrency is changing hands at $1,623 and is only up by 1.58% over the last 24 hours at the time of writing, according to data from CoinMarketCap.
According to metrics from the blockchain monitoring and analytics platform, Santiment, the number of active Ethereum addresses has declined very steeply right after hitting highs in early October.
This decline in the number of active Ethereum addresses suggests that despite last week's bullish movement, investor confidence in the cryptocurrency is still waning.
These concerns are severe because GlassNode, another blockchain analytics platform, has chipped in and pointed out that the number of Ethereum sharks and whales (holding more than 10,000 ETH) is now at a 7-month low. In greater detail, this number points to less than 1,200 addresses.
One of the only interpretations of the decline in active addresses is that these whales and sharks are beginning to dump their holdings and profit on Ethereum-based trading pairs.
Moreover, another cryptocurrency analytics platform has chipped in and suggested that last week's price increase was possibly caused by whales depositing large amounts of Ether on exchanges.
It is not a far-fetched idea that this recent pump may even be a deliberate attempt at a pump-and-dump event that raises the price of cryptocurrencies before an even bigger fall.
After breaking through the $1,500 support on Tuesday last week, Ethereum entered a brief correction and bounced off this support right after a retest.
During the weekend, the cryptocurrency attempted a break through the $1,600 zone and has now retested it as support. The cryptocurrency's price action over the coming days may depend solely on the strength of its bulls because the cryptocurrency's bullish momentum appears to be slowing down right after breaking through two support zones in succession.
Ethereum now appears to have bounced off the $1600 support and is trading at $1,625 at the time of writing.
On the daily chart, the price of Ethereum is far above its 50 and 100-day simple moving averages, indicating that the bulls may still be fully in control of the market.
The RSI on the daily timeframe is starting to lean toward the oversold territory but supports the verdict that the bulls are in control of the market for now.
The MACD as well, is showing no signs of bearishness. It appears to support the verdict of both the simple moving average and the RSI.
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