Ethereum, Why is $2,200 at Risk Despite Whales Accumulating 360,000 ETH?

▲ Ethereum (ETH)/AI-generated image ©

Despite the positive news of increasing institutional adoption, Ethereum is facing a test to defend its $2,200 support line amidst a shift of funds towards Bitcoin and macroeconomic pressures.

According to the investment media outlet TradingNews on May 13 (local time), Ethereum (ETH) was trading around $2,253, having fallen approximately 4.47% over the past week. The ETH/BTC ratio dropped to 0.02835, marking a 10-month low, which was interpreted as a signal that market funds are aggressively moving to Bitcoin. The media reported that Ethereum was the only cryptocurrency among the top 10 to record a negative return this week.

Technically, a new moving average golden cross has formed, but market sentiment remains mixed. The 20-day simple moving average is at $2,317, and the 50-day simple moving average is at $2,243, creating a short-term bullish signal. However, strong resistance zones are acting around $2,342 and $2,400 based on the Ichimoku Kinko Hyo. The Relative Strength Index (RSI) remained below neutral at 47.83, and the Average Directional Index (ADX) also indicated a lack of conviction in trend strength. The media analyzed that if Ethereum fails to break through the $2,342-$2,400 range, it could face downward pressure towards the $2,200, and even the psychological support level of $2,000.

On the other hand, on-chain data showed accumulation by whale investors. Large wallets, excluding exchanges, additionally purchased approximately 360,000 ETH during the recent correction period, which was interpreted as an indication that they perceive the $2,200-$2,400 range as a strategic accumulation zone. Cryptocurrency financial strategy firm BitMine also expanded its holdings to over 5.2 million ETH. Furthermore, Ethereum spot ETF funds recently recorded a net inflow of approximately $70 million, emphasizing that institutional demand has not completely subsided.

In terms of institutional adoption, the movement of JPMorgan, the largest investment bank in the US, drew market attention. JPMorgan applied to the US Securities and Exchange Commission (SEC) for 'JLTXX', an Ethereum-based tokenized Treasury bond fund. This product is based on short-term US Treasury bonds and repurchase agreements (RPs) and utilizes the Ethereum blockchain as a settlement layer. The media evaluated that the selection of Ethereum as a tokenized financial infrastructure by one of the world's largest financial institutions has significant long-term implications.

The macroeconomic environment was still cited as a burden. The US April Consumer Price Index (CPI) rose 3.8% year-over-year, and the Producer Price Index (PPI) surged 1.4% month-over-month, increasing inflation concerns. The US 10-year Treasury yield rose to 4.48%, marking a 10-month high, and the strengthening Dollar Index (DXY) also put pressure on the overall risk asset market. The media diagnosed that the impact of the Iran war, keeping international oil prices above $100 per barrel, is also dampening investor sentiment in the cryptocurrency market.

TradingNews assessed Ethereum's "most likely path" in the short term as sideways or bearish. However, if it breaks through $2,342, there could be room for a rebound to $2,460 and $2,600, and subsequently, the Fibonacci resistance zone of $2,961-$3,161 is also possible. Conversely, it warned that if $2,200 collapses, the risk of a decline to the $2,120 and $2,000 range could increase.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*