ETH price has rallied 85% since the bullish golden cross pattern formation in the daily chart in July.
Ethereum price is on an outstanding rally towards $5,000, climbing more than 55% in a month. However, a popular analyst highlighted indicators signaling ETH price may fall to $3,900.
Will Ethereum continue to rally to hit 5,000 or drop to $3,900 before another upside move targeting a new all-time high (ATH)?
Ali Martinez, a well-known analyst in the crypto industry, pointed out a sell signal on Ethereum flashed by the TD Sequential indicator in the daily chart.
He added that Ethereum price risks falling to $3,980 or $3,860 if it breaks below $4,150. However, the current sentiment on ETH remained extremely bullish due to the early altcoin season optimism.
Notably, the sell-side prediction by Martinez coincided with a CME gap between $4,092 and $4,200 in the daily timeframe. Typically, these get filled before an asset makes another upside move.
Traders also expect profit booking as ETH price reached near the previous ATH of $4,891. Also, Grayscale data indicated that ETH futures open interest hit a new ATH above $66 billion, which could trigger profit booking by traders.
Meanwhile, some whales have sold ETH or opened short positions as Ethereum approaches near ATH. Notable whale MachiBigBrother opened a short position with 25x leverage at $4,699, reported Onchain Lens.
Lookonchain also shared that an Ethereum ICO participant sold 4,283 ETH worth $18.97 million again. He has offloaded 44,284 ETH valued at $105 million since 2021.
At the time of writing, the whale still held 55,716 ETH worth $261.6 million.
The continuous inflow into spot Ethereum ETFs and accumulation by Ethereum treasury companies remained the primary catalysts behind the massive rally in Ethereum price.
Institutions flipped from Bitcoin to Ethereum, as ETH buying reached $8.2 billion year-to-date and even surpassed the total last year. Notably, ETH saw $268 million in inflows amid massive buying last week globally, pushing AUM to an all-time high of $32.6 billion.
Meanwhile, Tom Lee-backed Bitmine Immersion Technologies expanded its total Ethereum holdings above 1.15 million ETH worth over $5 billion. The firm even announced plans to raise another $20 billion to buy more ETH.
CryptoQuant data showed a parabolic rise in on-chain activity, with daily transactions reaching 1.875 million. It added that Ethereum is witnessing heightened user engagement and growing demand for block space.
When Ethereum network activity rises with significant trading volumes, ETH price gains massive upside momentum.
At the time of writing, Ethereum price jumped over 7% to $4,684 in the past 24 hours. The intraday low and high were $4,278 and $4,713, respectively.
Furthermore, trading volume spiked by almost 40% in the last 24 hours, indicating a massive interest among traders.
In the daily timeframe, ETH price formed a golden cross pattern in early July. This supports a further upside move in ETH price, but after a cooldown in sentiment as RSI hit 80.
CoinGlass data showed massive buying in the derivatives market. At the time of writing, the total ETH futures open interest jumped 18% to $66.33 billion in the last 24 hours.
Also, ETH futures OI on CME and Binance climbed more than 15% and 18%, respectively. This signals bullish sentiment among derivatives traders.
