XDC Network (xdc) 
Ethereum’s price has dropped by 5% from its recent peak, prompting speculation about whether the asset will reach $5,000.
The highly-anticipated Ethereum Dencun upgrade was launched on the mainnet on March 13. Despite this, the price of ETH has struggled to maintain an upward trajectory since the upgrade, casting doubt on the possibility of a rapid rally towards $5,000.
Ethereum traders are capitalizing on the hype surrounding the Dencun upgrade. When Ethereum developers announced the successful test run of the upgrade on Jan. 30, it generated bullish sentiments among ETH traders.
Over the following 40 trading days, Ethereum’s price surged by 70%, reaching a peak of $4,092 on March 12 as optimistic traders bought in on the promise of improved transaction speeds and scalability.
However, once the upgrade went live on the mainnet, ETH deviated from the broader crypto market trend as traders began selling off their holdings.
The taker buy/sell ratio provided by CryptoQuant offers real-time insights into the trading activity on crypto exchanges. The ratio for Ethereum swung negative as prices surpassed $4,000 in early March, hitting a 40-day low of 0.93% on March 14, shortly after the Dencun upgrade launch.
Negative taker buy/sell ratio values signify increased selling activity compared to buying activity in ETH perpetual swaps markets, indicating a potential downward pressure on prices.
The selling pressure observed in Ethereum markets post the Dencun upgrade hints at a classic “buy-the-rumor, sell-the-news” cycle. Additionally, the influx of new ETH coins into exchange wallets suggests that more investors are looking for short-term trading opportunities.
Existing Ethereum holders transferred 74,000 ETH coins to exchange wallets within the week, totaling approximately $290 million. This influx of coins may lead to a market supply dilution, potentially driving the price of ETH below $3,900 in the coming days.
Based on the market trends analyzed, it is unlikely that the Dencun upgrade excitement will propel Ethereum’s price to $5,000 in the near future. Instead, ETH price is expected to dip below $3,900 as traders continue to introduce new coins into the market.
The $3,840 level is a critical support level, with data showing that a significant number of addresses purchased ETH at an average price of $3,836. A rebound could be triggered if these holders make covering purchases to avoid losses.
On the flip side, a drop below $3,830 could trigger margin calls and stop-loss orders, given the number of investors who bought ETH at that price range. Bulls need to establish a strong support base above $4,050 to regain control of the short-term market momentum.
