- ETH bulls have been attempting to push for a recovery rally but have been facing resistance near the $2700 price level.
- As a result, investors are starting to falter, adding to the risk of capitulation.
It has been a week since Ethereum [ETH] embarked on a journey to recovery after crashing earlier this month. This allowed the market ample time to test the waters, and evaluate momentum and demand.
So far, the cryptocurrency has struggled to push well beyond $2,700, signaling weak demand above this price level.
Will ETH capitulate to lower prices?
ETH had a press time price of $2,649, down by 2.61% in the last 24 hours. This outcome further supported the observed lack of demand, underpinned by market uncertainty.
Source: TradingView
The RSI stayed below its 50% level, further confirming weak bullish momentum. This was further supported by reports earlier in the day, indicating that some institutions have been now offloading some of their ETH.
For example, private venture capital firm BlockTower reportedly sold 9,232 ETH worth approximately $24.8 million in the last few hours.
While these findings may suggest that the market is still on the edge and indecisive, some offers some confidence.
For example, the percentage of ETH in smart contracts has been rising and, at press time, was approaching 40%.
Source: Glassnode
The chart indicated that DeFi utility had been gaining traction, which should bode well for ETH’s demand.
In other words, organic demand has been growing, but ETH’s suppressed price action appeared to be as a reflection of market sentiment rather than on-chain performance.
The impact of market sentiment was evident in ETH exchange flow data. The cryptocurrency’s exchange netflows have for the most part been negative since the peak of the dip.
This meant it had maintained slightly higher outflows than inflows.
Source: CryptoQuant
Despite the observation, the exchange flows remain low, hence coinciding with the state of uncertainty in the market. This means there is still a chance that the market could easily be swayed in either direction.
Less FUD in the market may trigger higher demand for ETH. However, the appositive will be true if the market remains fearful, possibly paving the way for more capitulation in the coming days.
Read Ethereum’s [ETH] Price Prediction 2024-25
The Fear and Greed Index indicated a slight recovery from extreme fear in the last 48 hours.
If this recovery continues, then ETH bulls might finally get a chance to push beyond current resistance and possibly towards 3,000 within the week.