Ethereum: Why can't it rise despite positive news?

▲ Ethereum (ETH) ©Go Dasol

Despite strong on-chain fundamentals, Ethereum (ETH) is struggling to find its direction. With an increase in exchange holdings and outflows from Ethereum spot ETFs overlapping, analysis suggests that short-term selling pressure in the market is growing.

According to investment media FXLeaders on May 15 (local time), Ethereum is currently trading around $2,313 and has been maintaining a sideways trend between the $2,230 support level and the $2,342 resistance level for the past few days. The market is assessed to be in a phase of searching for direction amidst a lack of clear upward momentum.

In particular, the increase in ETH holdings on Binance is raising market caution. According to the media, Binance's exchange holdings increased by approximately 320,000 ETH from May 5 to 10. Currently, about 25% of the total Ethereum held on exchanges is concentrated on Binance. Generally, an increase in exchange inflows is interpreted as a signal of short-term supply pressure, as it implies a potential increase in sell-side liquidity.

Institutional fund flows are also showing signs of slowing down. Fidelity's Ethereum spot ETF, FETH, recently experienced an outflow of $103.6 million in a single day. Market analysis suggests that institutional demand has noticeably slowed down after the initial ETF excitement. However, despite JPMorgan's tokenized Treasury fund JLTXX being launched on the Ethereum network, the price reaction was limited, leading to the assessment that the current market finds it difficult to generate upward momentum with simple positive news alone.

Technically, a mixed trend continues. The 50-day and 200-day moving averages are clustered around $2,361 and $2,367 respectively, and the market views this range as a key turning point. If Ethereum strongly breaks through this range, the possibility of reaching $2,750 could open up, but conversely, if it faces resistance, a retest of $2,200 and $2,108 is also discussed. The Relative Strength Index (RSI) remains in neutral territory at 59, and although the Moving Average Convergence Divergence (MACD) has formed a golden cross, analysis suggests that upward momentum is limited.

However, on-chain fundamentals are still assessed to be solid. Recently, whale investors have reportedly accumulated an additional approximately 140,000 ETH, valued at around $322 million. Currently, the amount of staked ETH is approximately 37 million, accounting for about 30% of the total circulating supply, and the total value locked (TVL) in DeFi has recovered to $45.74 billion. While the market assesses Ethereum's long-term fundamentals to remain strong, given its 68% share of the global DeFi market, the influx of new buying power is emerging as the most critical variable in the short term.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*