Ethereum faces $4,900 test – Could whales be key to its next price breakout?

Key Takeaways

Whales withdrew 200k ETH in just 48 hours, tightening supply and fueling speculation about whether reduced liquidity could fuel a breakout. The altcoin’s price bands and weakening sentiment could have a part to play here. 

Ethereum [ETH] recorded withdrawals of 200,000 ETH within just 48 hours, significantly tightening the available supply on exchanges. Such aggressive outflows are usually linked to accumulation by large holders, who prefer custody over active trading. 

Therefore, this move reduces immediate sell-side liquidity, potentially supporting price stability. Historically, large exchange outflows have often preceded price hikes due to diminished selling pressure. 

However, if demand fails to match reduced supply, the effect can be muted. Thus, monitoring whale behavior will be key to confirming whether these withdrawals establish a lasting supply squeeze or not. 

Will realized price bands trigger profit-taking?

At the time of writing, on-chain data highlighted Ethereum approaching its upper realized price band – A zone often associated with profit-taking among seasoned investors. Here, it’s worth pointing out that this indicator compares market value with the realized price of coins, helping highlight moments of overextension. 

Right now, ETH is testing this boundary – A sign that some holders may look to secure profits. However, during strong bullish cycles, assets have often extended above this zone before consolidation. 

Therefore, while the realized band could allude to caution, it might also reinforce the importance of observing whether demand growth can absorb potential selling pressure at current levels.

Source: CryptoQuant

Can Ethereum break past $4,900 resistance?

Ethereum’s price action underlined clear resistance around $4,921, aligning with the Fibonacci extension targets. The $4,770 support has held firmly, with the ascending trendline reinforcing upward momentum. 

Moreover, the MACD indicator was above the signal line, hinting at a positive bias despite recent consolidation. Breaking above $4,900 could unlock further upside, with the next major extension targeting above $5,800. 

However, failure to breach resistance may invite a short-term pullback. Therefore, upcoming price movements around this zone will likely confirm whether Ethereum can sustain its bullish momentum or stall at this barrier.

Source: TradingView

Why does sentiment volatility signal a cautious market?

Ethereum’s weighted sentiment sat at -0.093, at press time. That marked a sharp cooldown from mid-August spikes near +3.9. Earlier this month, troughs hovered around -1.1, highlighting fragile confidence.

Social dominance stood near 9.6%, after peaking above 19% recently. While market attention has remained high, conviction has softened on the back of the price testing heavy resistance levels.

Therefore, a rejection near $4,900 could extend negativity and accelerate profit-taking. 

Source: Santiment

To conclude, Ethereum faces a decisive moment as exchange outflows, realized price positioning, technical resistance, and sentiment volatility converge. 

If ETH breaks past $4,900 with strong momentum, reduced supply and network activity could fuel further gains. On the contrary, the realized price bands and fragile sentiment hinted that profit-taking could happen too.