Ethereum Long-Term Investors Sell Again: Are Bears Taking Over?

On June 20, an important on-chain indicator tracking the behavior of long-term ETH holders (LTHs) reached an All-Time-High, indicating increased selling pressure from this group.

This occurs against a backdrop of significantly reduced broader market momentum. As demand for ETH weakens and investors largely remain on the sidelines during a prolonged market stagnation, negative sentiment is increasing.

Ethereum Activity Indicator Reaches Record Level

According to glassnode, ETH Liveliness surged to an All-Time-High of 0.69 during Friday's trading session. This indicator tracks the movement of long-held/inactive tokens by measuring the ratio between the number of days a coin is destroyed compared to the total number of accumulated coin days.

When this indicator decreases, an asset's LTHs are moving their assets off exchanges, a move considered an accumulation signal. Conversely, as with ETH, when it increases, LTHs are moving their coins onto exchanges to sell.

The surge of ETH Liveliness to 0.69 indicates that its LTHs are increasingly liquidating their positions as uncertainty grows. This reflects increasing lack of confidence in the coin's short-term price recovery potential.

Further confirmation of this negative trend can be found on ETH's daily chart, where the coin's Chaikin Money Flow (CMF) is negative and trending downward. At the time of writing, ETH's CMF stands at -0.08, indicating a decline in Capital inflow.

The CMF indicator measures money flow in and out of an asset. When its value is negative, it signals low buying interest and confirms a shift towards distribution rather than accumulation.

ETH Likely to Decline to May Lows

The continuous Dump by long-term ETH investors, combined with decreased market demand for the coin, could lead to a deeper correction in the short term.

At the time of writing, this top altcoin is trading at $2,429. If selling continues among ETH's long-term investors, the coin could drop to $2,185. If this floor price doesn't hold, the coin could fall further to $2,027, the low it last reached in May.

Conversely, a revival in new demand for the altcoin would nullify this negative outlook. In that scenario, its price could reverse the downward trend and increase to $2,745.