Profit-Taking Drives Ethereum (ETH) to Overbought Levels Close to Major Resistance

Despite a brief increase over the weekend, Ethereum struggled to maintain its rise above the $2,600 mark. The cryptocurrency fell to $2,400 before recovering slightly to return to the $2,600 level.

Recent data suggests that a short-term decline may occur before a significant surge can take place.

### Period of Consolidation Ahead of Breakthrough

Ethereum’s market appears to be reaching a boiling point as it approaches the $2,500 resistance zone, with trading volumes seeing a notable rise, indicating heightened market activity.

A recent report highlights that this increase is largely due to profit-taking and the presence of supply orders at this critical psychological barrier. As Ethereum enters this overheated phase, experts predict a temporary correction to allow the market to stabilize before any potential increases.

> “As a result, Ethereum is likely to remain in a consolidation phase until new demand emerges to facilitate a breakout above this resistance level in the medium-term.”

While short-term indicators suggest a cooling period, long-term investors are actively acquiring more of the cryptocurrency.

### Strong Long-Term Commitment

The availability of Ethereum on centralized trading platforms has dropped to its lowest level in over ten years, driven by increased accumulation from large holders and institutional investors. As of May 19, data showed that merely 4.9% of the total ETH supply was on exchanges, marking a historic low. Over the past five years, 15.3 million ETH has been withdrawn from these trading platforms.

In addition, it was revealed that over 1 million ETH left exchanges in the previous month, signaling a preference among users for holding ETH over trading. On-chain metrics further support this trend, indicating that whales—wallets holding more than 10,000 ETH—have added 450,000 coins since late April. By May 10, their total holdings reached 40.75 million ETH, the highest since March.

Investment products linked to Ethereum also experienced a welcomed influx over the past week, with inflows of $205 million reported during the period, reflecting renewed investor confidence following the latest upgrade. This brought the total for the year to $575 million.