All bullish signals are on... Ethereum 'hesitates' at $2,100 due to hidden sell wall

▲ Ethereum (ETH)/ChatGPT generated image

Ethereum (ETH) is holding steady around the $2,100 mark, but the market structure is sending confusing signals, with buying and selling pressures clashing head-on. While surface-level indicators point to bullish sentiment, analysis suggests that large sell volumes are absorbing aggressive buying, preventing price recovery.

According to Bitcoinist on May 25 (local time), Ethereum rebounded with Bitcoin (BTC) amid expectations of easing tensions in the Middle East, but the recovery was short-lived. XWIN Research Japan analyzed Ethereum's internal market structure and concluded that despite indicators typically signaling a healthy market appearing simultaneously, the price showed weakness.

The spot taker cumulative volume delta (CVD) remained positive, indicating that buyers had an edge over sellers in order flow, and funding rates stayed above 0, showing that derivatives participants were paying to maintain long positions rather than shorts. Net outflows from exchanges also continued, signaling that Ethereum was moving towards individual custody rather than exchange sell-side liquidity. However, Ethereum fell by 14% from approximately $2,375 on May 11 to about $2,031 on May 23.

XWIN Research Japan found the core of this contradiction in hidden liquidity. They explained that large limit sell orders placed by market makers and whales on the order book are quietly absorbing aggressive buying, and these volumes are not clearly visible in the indicators primarily checked by retail investors. In other words, buying pressure does exist, but a larger, more patient selling pressure is preventing price increases.

The macroeconomic environment is also adding to Ethereum's burden. While the U.S. cryptocurrency market structure bill initially improved investor sentiment for digital assets, the market is once again focusing on inflation risks and a prolonged high-interest rate environment. Bitcoinist stated that as high-beta assets like Ethereum are highly sensitive to broad risk-on sentiment, improvements in on-chain indicators alone may not be enough to fully offset macroeconomic pressures.

Analysis suggests that the derivatives market is also far from a pure bull market. A healthy uptrend would typically show an increase in open interest, stable funding rates, and an expansion of long positions simultaneously. However, the current rebound is assessed to be more akin to a mechanical movement created by short covering and deleveraging rather than new directional demand. Technically, Ethereum has not reclaimed the resistance zone of $2,250 to $2,350, and a clear loss of the $2,080 to $2,100 zone could quickly push it down to the lower support area of $1,820 to $1,880, a warning stated.

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