On shorter timeframes, Ether is at risk of becoming overbought, resulting in sell-offs as it retests a key resistance level.
On May 30, Ethereum's native token, Ether (ETH), climbed more than 5% to an intraday high above $2000. Despite this, the ETH/USDT pair is at risk of another sell-off due to fears of a large ETH inflow into an exchange.
In May, 58.6K Ether was transferred to FTX. On-chain data shows that on May 30, an Ether address linked to Three Arrow Capital, a Singapore-based crypto hedge fund, deposited 32,000 ETH worth $60 million to the FTX crypto exchange in less than an hour.
The large transfer, which came after the fund's 26,700 ETH deposit to the same exchange earlier in May, fuelled fears that the Ether stockpile would be dumped. This is due to the fact that, in principle, investors only transfer cryptocurrency to exchange wallets when they intend to sell it for other assets. Despite this, the number of Ether owned by exchanges decreased in May.
Month-to-date (MTD), the total ETH balance on all crypto exchanges fell from 20.456 million to 20.37 million, indicating that investors are sticking with their investments for the long haul.
The ETH recovery has slowed. Three Arrow's big Ether move to FTX comes as ETH is testing a key support-turned-resistance level at $2000 in preparation for a breakout.
Simultaneously, Ether's relative strength index is approaching the "overbought" threshold of 70, which, in technical analysis, usually signals a sell-off. In other words, in the coming days, ETH could consolidate around $1,950 before pulling down to its rising trendline support near $1,850.
A significant advance above the $2000-level, coupled by an increase in trade volumes, on the other hand, might initiate a long-term upside scenario, as depicted below, as supplied by "Wolf," a pseudonymous market expert.
In a so-called accumulation range, the levels around $1,820 serve as support, while $3,000 serves as resistance on the other end. Wolf predicted that the price will rise to $3,000 "a few months after the Merge," a much-anticipated upgrade that will turn Ethereum into a proof-of-stake network.