Ethereum’s recent bullish rally seems to be losing steam as holders take profits, causing a pullback in price. Ethereum (ETH) is currently trading at $2,438, reflecting a 3.5% decline in the past 24 hours. This follows a substantial 34% surge over the past week, during which the cryptocurrency climbed from $1,800 to over $2,500 in just days.

Profit-Taking and Supply Distribution

Analysis suggests that Ethereum’s rapid ascent was driven by minimal resistance between the $1,800 and $2,500 range. However, the rally faced significant resistance near $2,580, a critical price zone where approximately 1.3 million ETH had been accumulated by holders. As the price approached this level, the supply held at this range dropped to 1 million ETH, indicating that many investors sold their holdings near their break-even point. This profit-taking behavior contributed to the recent pullback.

“Ethereum’s sharp move above $1.8K to $2.5K was aided by the low supply concentration in that range. The rally stalled near $2.58K, where ~1.3M ETH was held. As price approached this level, supply there fell to 1M, indicating distribution near cost basis as holders exited.”

Spot Demand Driving the Rally

Unlike many previous rallies driven by leveraged trading, the recent surge in Ethereum’s price appears to have been propelled by spot market demand. Funding rates, which measure sentiment in the futures market, have remained flat, suggesting that the buying pressure largely came from direct purchases rather than borrowed funds. This reduces the risk of sudden price crashes caused by mass liquidations.

While this signals healthy market activity, sustained upward momentum may require funding rates to rise slightly, indicating that futures traders are gaining confidence in Ethereum’s price trajectory.

Technical Indicators Suggest Possible Exhaustion

From a technical perspective, Ethereum’s recent rally shows signs of short-term exhaustion. The daily relative strength index (RSI) currently sits at 75, placing it in the overbought zone. This suggests that the cryptocurrency may experience a pause or a pullback in the coming days.

However, Ethereum remains above all key short- and mid-term moving averages, including the 10-, 20-, 30-, 50-, and 100-day exponential and simple moving averages (EMAs and SMAs). Additionally, the moving average convergence divergence (MACD) indicator is positive at 187.5, signaling continued upward momentum.

Key Resistance and Support Levels

Ethereum is currently facing resistance at the $2,474 level. A sustained breakout above this level could pave the way for further gains. Conversely, failure to maintain its position above $2,400 may lead to a correction toward the $2,200 support range.

Traders and investors will closely monitor Ethereum’s price movement in the coming days to determine whether it can break above the critical $2,580 resistance level or if the recent rally will transition into a deeper price correction.

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