Ethereum (ETH) continues to retreat in its price as it recently tested the resistance level of $4,000, which is an important psychological price mark for the cryptocurrency. During this correction, a bearish trend among investors in Binance has emerged.
A recent analysis by CryptoQuant analyst Darkfost highlights an important trend where Binance’s buy-sell ratio for Ethereum turned “deeply negative” at the $4,000 mark. This suggests that traders in the trade have mainly accepted the selling position.
The Ethereum Tug of War
According to Darkfost, the bearish sentiment on Binance has continued since early November, matching Ethereum’s approach to this critical resistance level.
The analyst pointed out that although this bearish sentiment may indicate a possible reversal, Ethereum price movements have defied the perception of a higher bearish trend, driven by other influential factors.
Notably, the demand for Ethereum Exchange-Traded Funds (ETFs) has grown, reflecting the growing institutional interest that continues to support the Ethereum price action.
The increase in demand for Ethereum ETFs marks a change in the market environment where institutional players have an increasing influence on price movements.
Institutional interest, evidenced by consistent inflows into Ethereum-focused investment products appears to have been instrumental in alleviating the selling pressure seen among retail traders on Binance.
ETH Market Performance and Outlook
So far, Ethereum has seen a significant correction in its prices down to $3,616 as of today. At the time of writing, the stock is currently trading at a price of $3,621 down about 6% on the previous day.
Notably, this price action has dramatically reduced the stock market by more than $40 billion, dropping from more than $490 billion seen last week on Friday to $434 billion today.
It is interesting that despite this decrease in price, the daily trading volume of Ethereum has seen the opposite trend and increased from less than 60 billion dollars on December 6 until now at 72 billion dollars. Given the current market situation, it is possible that the increase in ETH volume comes from selling.
According to data from Coinglass, in the last 24 hours, 526,828 traders were liquidated with a total of $1.58 billion. In this complete liquidation, ETH made about $234.72 million.
Long-term spending is up to $208.83 million. Short sellers also had their share losses registering the withdrawal of ETH in the amount of $25.89 million.
Despite this, analysts are still optimistic about Ethereum, suggesting that the current price dip is “healthy” for ETH markets.
$ETH stay strong on HTF!#Ethereum a healthy weekly fix will be left behind AS A RECOVERY and thrown hard! pic.twitter.com/YSixFqjuLQ
– EᴛʜᴇʀNᴀꜱʏᴏɴᴀL
The featured image was created with DALL-E, a Chart from TradingView