Ethereum is struggling to regain momentum after a 6% plunge in the past 24 hours pushed the altcoin king back from the crucial $3,000 barrier.
This level is acting as psychological and technical resistance, and this rejection comes at a time when some of Ethereum's most influential holders are retreating.
Supply drop for Ethereum holders
HODL Waves data shows that long-term holders of Ethereum (LTH) have been offloading their assets since early November. This selling pressure intensified around November 19th, leading to a significant reduction in supply controlled by the 2-3 year cohort. Their share of circulating supply decreased from 8.51% to 7.33%. This is a clear sign that the group is moving to offset losses and reduce its risk exposure.
Given that LTH tends to be the most stable participant in the Ethereum ecosystem, the sale of LTH has a direct impact on price performance. More importantly, their positions have not recovered since the drop, creating a supply gap that new investors will need to fill if ETH is to regain upward momentum.
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Ethereum HODL Wave. Source: Glassnode
Fortunately, there are positive signs of new demand for Ethereum. Over the past seven days, new addresses on the network increased by 13.4%, from 141,650 to 160,690. This was the strongest weekly gain in more than two-and-a-half months and shows renewed investor interest despite a recent correction.
New addresses often lead to an influx of fresh capital into the market, which is critical for Ethereum as it looks to stabilize above major support levels. However, maintaining this growth is essential. If the influx of new holders slows, the market may not be able to make up for the lack of LTH participants.
Ethereum new address. Source: Glassnode
ETH price has not found direction yet
Ethereum is trading at $2,805 at the time of writing, reflecting a daily decline of 6%. The asset sits just below the $2,814 resistance level after its recent attempt to break above $3,000 failed.
Based on the current sentiment and market structure, ETH is likely to attempt a stable recovery, but a strong recovery will require consistent support from investors. In the short term, Ethereum is likely to fluctuate between $2,814 and $3,000 as it searches for direction.
ETH price analysis. Source: TradingView
If the bullish momentum strengthens and new demand remains steady, Ethereum could finally break through the $3,000 barrier. A successful breach would pave the way for a move toward $3,131 and possibly $3,287. If that happens, the short-term bearish theory will be invalidated.
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