Ethereum (ETH) recently tested the $4,000 resistance level, an important psychological price mark for the cryptocurrency, resulting in a continued decline in price. Amid this correction, investor bearishness towards Binance has surfaced.
A recent analysis by CryptoQuant analyst Darkfost highlighted a key trend: Binance’s buy/sell ratio to Ethereum “quickly turned negative” at $4,000. This suggests that traders on the exchange are primarily adopting a selling stance.
Ethereum tug of war
According to Dirkforst, the bearish sentiment towards Binance has been ongoing since early November and coincides with Ethereum approaching this critical resistance level.
Analysts note that while this bearish sentiment may typically indicate a possible reversal, Ethereum's price movement bucks a high bearish trend caused by other influential factors. did.
In particular, demand for Ethereum exchange-traded funds (ETFs) has soared, indicating increased interest from institutional investors, which continues to support Ethereum's price movement.
The surge in demand for Ethereum ETFs signals a change in market stance, with institutional investors increasingly influencing price movements.
Institutional investor interest, evidenced by consistent inflows into Ethereum-focused investment products, appears to have been crucial in offsetting the selling pressure observed among retail traders on Binance.
ETH market performance and outlook
So far, Ethereum has seen a significant price correction, dropping to $3,616 as of today. As of this writing, the asset is down nearly 6% over the past day and is currently trading at a price of $3,621.
In particular, this price performance has unsurprisingly caused the asset's market capitalization to fall by over $40 billion, from over $490 billion last Friday to $434 billion today.
Interestingly, despite this price drop, Ethereum's daily trading volume has increased in the opposite trend, from less than $60 billion on December 6th to $72 billion today. Considering the current market situation, the increase in ETH volume is likely due to sales.
According to data from Coinglass, 526,828 traders were liquidated in the past 24 hours, bringing the total liquidation amount to $1.58 billion. Of this total liquidation amount, ETH will account for approximately $234.72 million.
Long-term liquidations accounted for the majority, amounting to $208.83 million. Short traders also suffered losses on stocks recording $25.89 million worth of ETH liquidations.
Regardless of this, analysts are still optimistic about Ethereum, suggesting that the current price drop is very “healthy” for the ETH market.
$ETH HTF is still strong!#Ethereum Weekly healthy fixes are left as a retest and pumped with enthusiasm. https://t.co/o78x8eBucf pic.twitter.com/YSixFqjuLQ
— EᴛʜᴇʀNᴀꜱʏᴏɴᴀL (@EtherNasyonaL) December 10, 2024
Featured images created with DALL-E, TradingView charts
