Ethereum recently surged over the weekend but struggled to maintain its momentum above $2,600, eventually dropping to $2,400 before recovering and returning to the $2,600 level.
New data suggests that Ethereum may experience a short-term pullback as it approaches the key resistance zone. The market appears to be overheating as profit-taking intensifies and a significant amount of supply rests at the critical $2,500 mark.
Cooling Phase Before Potential Breakout
Ethereum’s market is showing signs of overheating as it nears the $2,500 resistance. Increased trading volume signals heightened activity, primarily driven by profit-taking and the build-up of supply at this psychological level. Analysts predict a short-term correction that could provide the market with time to cool off before a possible breakout.
Long-Term Bullish Sentiment Remains
While short-term signals point to a cooling phase, long-term holders continue to accumulate Ethereum. Data from Santiment reveals that only 4.9% of the total ETH supply remains on exchanges, a historic low. This is in line with growing institutional and whale accumulation, with over 1 million ETH exiting exchanges in the past month.
Ethereum-linked investment products are also seeing strong inflows, reflecting renewed investor confidence.
