Ether is in danger of selling off just as it prepares to retest key resistance.
Ethereum’s native token Ether (ETH) rallied more than 5% to hit an intraday high above 1930 USD on May 30. However, the ETH/USD pair is at risk of facing another sell-off due to concerned about a large amount of ETH being pushed to the FTX exchange.
On the same day, an Ether wallet address believed to be affiliated with Three Arrows Capital made a significant move. Singapore-based crypto hedge fund, sent a total of 32,000 ETH worth $60 million to crypto exchange FTX within an hour.
In theory, investors only transfer cryptocurrencies to their exchange wallets when they want to sell them for other assets. Three Arrows Capital’s willingness to trade more ETH, following the fund’s 26,700 ETH deposit to the same exchange earlier in May, raised suspicions that the fund is selling off Ether.
In addition, according to Glassnode on-chain data, the amount of Ether held by exchanges continued to decline in May. ETH balances across all crypto exchanges fell from 20.45 million down to 20.38 million as of now, highlighting that investors intend to hold their investment for the long term.
Three Arrow’s massive push of Ether to FTX comes at the same time that ETH is retesting key support resistance at the $1920 region for a breakout. Ether’s RSI is nearing the “overbought” level of 70, which as a rule of technical analysis tends to precede a sell-off. In other words, ETH could consolidate around the $1920 level in the coming days before pulling back to the uptrend line support near 1850.
There is also mixed opinion that a decisive move above the $1,920 level, accompanied by an increase in trading volume, could trigger a long-term bullish setup. The setup shows levels around $1,820 as support in a so-called accumulation range, with $4,000 acting as resistance on the other end. Noting that the price could rise to the $4,000 level “a few months from Consolidation”, a much-awaited upgrade that will make Ethereum the proof-of-stake protocol.
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