Cryptocurrency Ethereum (ETH) is hovering at a critical crossroad. The digital asset made a new all-time high briefly during the Shapella Upgrade. However, since then the price action has started to look weak and the critical $1,850 level has been broken. But right now the on-chain data strongly suggests that the tone of the market could be changing soon.

The balance of Ethereum coins deposited on known exchanges has been in a steady decline since April 18. It is estimated that nearly $500 million worth of ETH has been moved off exchanges in the past 5 days. This indicates that investors are taking profits, but also suggests that Ethereum holders have renewed faith in the blockchain network, and are willing to trust it for storing their funds long-term.

The bullish sentiment is also confirmed by the increasing ETH supply in DeFi smart contracts. There have been more than 600,000 ETH deposited back into Ethereum-hosted DeFi protocols since the Shapella Upgrade. This indicates that previous bearish investors are now rewarding the Ethereum network by staking their coins in DeFi protocols to earn higher yields.

The influx of funds into the decentralized finance sector could further accelerate Ethereum's growth and spur on its value. At the same time, if the $1,850 support level holds, Ethereum could possibly start an upward trend towards the $2,000 mark. But the resistance of 2.5 million holders with their 8.4 million coins at that price could certainly push Ethereum into a reversal.

Nevertheless, the road ahead is far from certain and the fate of Ethereum (ETH) hangs in the balance. Time will tell whether investors are enticed by the bullish sentiment, or become fearful of potential sell-offs.

Either way, Ethereum's price will remain at a critical junction of either rising to a new all-time high of $2,000, or possibly seeing a steep decline to the next support level at $1,450.



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