Ethereum bulls may fail due to this trend reversal.
Ethereum price recently broke out of a bullish triangle pattern, suggesting renewed bullish momentum.
However, that glitch now appears to have been exposed. ETH has posted a bearish divergence for almost three weeks, raising concerns that the move was not a fluke.
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Critical Ethereum holders are pulling back.
Ethereum has shown a clear bearish divergence over the past three weeks, indicating weakening internal strength. As the price of ETH continues to form higher levels, the Chaikin Money Flow Indicator posted higher lows. This pattern indicates that inflation is associated with capital outflows rather than continuous income inflows.
Such a divergence often precedes a trend reversal. Investors seem to be distributing ETH to strength instead of hoarding it. As capital leaves the market during price expansions, the upside momentum erodes. This variable increases the risk of a failed transaction, especially in the sensitive crypto environment.
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Macro data reinforces the bearish signal seen in momentum indicators. Ethereum whales have increased selling activity in the past week. According to chain data, wallets holding between 100,000 and 1 million ETH will sell for more than 230,000 ETH.
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This selling pressure amounts to approximately $760 million at current prices. Large wallet withdrawals are consistent with the CMFF, which ensures a decrease in trust between principal holders. As whales sell toward the break, price sustainability weakens, increasing the likelihood of further declines in the near term.
The price of ETH may face a fall.
At the time of writing, the price of Ethereum has moved to $3,309, holding above the $3,287 support level. A recent triangle breakout will see a 29.5% upside move, targeting $4,240. However, the declining pace and diversity of depression threatens to negate that bullish structure.
Given the current conditions, ETH may miss the $3,287 support. A breakout would send the price to the $3,131 level, confirming the move as a false breakout. Such a rejection will add selling pressure and may follow a deep correction below $3,000.
Still, the damage is not guaranteed. If ETH successfully rallies above $3,287 and the whale sell-off subsides, bullish momentum could return.
Holding that support could allow Ethereum to push towards $3,441. Further strength could extend gains to $3,802, undermining the outlook.
