Ethereum’s Paradox: Bearish Pressure Clashes with Bullish On-Chain Signals

Ethereum’s sending mixed messages—price action wobbles under sell pressure while its blockchain screams strength. Here’s why traders are scratching their heads.

Bearish winds blow, but fundamentals dig in

Whales are dumping, retail’s sweating, yet Ethereum’s network metrics look healthier than a Wall Street CEO’s bonus. Daily active addresses? Up. Transaction volume? Robust. Staked ETH? Locked and loaded. The chain’s working overtime while its token plays dead.

The trader’s dilemma: FOMO or flee?

Technical charts flash red, but on-chain data paints a green utopia. Institutions keep stacking, developers keep building—meanwhile, leverage traders get liquidated faster than you can say ‘overcollateralized.’ Classic crypto cognitive dissonance.

Bottom line: Ethereum’s playing 4D chess while the market checks CoinGecko. Whether this is accumulation before a breakout or denial before collapse depends on who’s holding the bag—sorry, ‘diversified portfolio.’

Key Takeaways

Ethereum’s Net Taker Volume hit -$418.8 million, signaling extreme selling. Yet, rising network activity and long-term holder profits suggest ETH could rebound if bulls reclaim $3,950 soon.

Ethereum’s [ETH] Net Taker Volume plunged to -$418.8 million—its second-largest daily sell-side imbalance ever recorded.

That means 116,000 more ETH were sold than bought in a single day, according to CryptoQuant. Historically, such heavy-handed selling has preceded local tops, acting as reversal signals.

However, ETH continued hovering NEAR $3,643, showing that buyers are still absorbing pressure, for now.

If support continues holding, ETH could stabilize before making its next move. For now, market participants remain divided on whether to expect continuation or correction.

Is Ethereum’s bullish setup breaking down below resistance?

Ethereum recently completed a textbook cup and handle formation, signaling bullish continuation. 

However, the price failed to reclaim the neckline resistance at $3,950 and now consolidates within a descending channel. 

RSI stood at 57, hinting at neutral momentum with no clear breakout pressure. The failure to rally above key levels may invalidate the pattern if bulls do not regain control soon. 

Therefore, ETH must reclaim $3,950 quickly to sustain the bullish structure. A rejection at this level could open the door to further retracement toward support.

Source: TradingView

Will on-chain growth help Ethereum counter bearish signals?

Despite bearish market pressure, Ethereum’s network activity is on the rise. According to IntoTheBlock, New Addresses surged 29.94% while Active Addresses climbed 3.17%.

Historically, increased address growth provides a strong foundation for price stability and recovery. 

Therefore, this divergence between price action and on-chain trends may signal underlying strength.

If user activity remains elevated, ethereum could maintain support and rebound, even as sell pressure continues challenging bullish expectations.

Source: IntoTheBlock

Are LTHs still confident in Ethereum’s valuation?

On-chain valuation indicators are painting a nuanced picture.

The NVT Ratio (with Circulation) has spiked, showing that Ethereum’s market cap is outpacing transaction activity. This typically points to short-term overvaluation.

However, the MVRV Long/Short Difference remains above 12.36%, revealing that long-term holders are still sitting on sizable unrealized gains.

This reflects strong conviction from seasoned investors despite recent market weakness. While there’s a risk of profit-taking, the ongoing commitment from these holders provides a cushion. 

Therefore, if long-term participants continue holding firm, Ethereum could remain resilient and eventually retest the $3,950 resistance with renewed momentum.

Source: Santiment

Can bulls reclaim control?

Conclusively, Ethereum faces a critical test as record-level sell pressure clashes with improving on-chain trends and strong holder conviction.

Price must reclaim $3,950 to confirm a bullish breakout. However, rising address activity and long-term support could offer resilience. 

The coming days will reveal whether buyers can push Ethereum higher, or whether recent sell-offs will trigger a deeper retracement. Until then, ETH remains at a pivotal point between support and resistance.