Ethereum's (ETH) price hovers around $3,900, but a drop could be on the horizon. On-chain data indicates a significant increase in the amount of Ether deposited into exchanges, reaching levels not seen since January 2024.

Surge in Ethereum Exchange Inflows

Data from IntoTheBlock reveals that net deposits to exchanges surged to 140,660 ETH last Saturday, marking the largest inflow in over four months. Typically, high inflows to exchanges signal that investors might be preparing to sell, either to take profits or due to fear and uncertainty in the market.

Additionally, some long-term Ethereum holders are capitalizing on the recent price rise. On-chain data provider Lookonchain reported that a savvy investor sold 3,025 ETH for 11.8 million DAI at $3,904 per ETH, making a profit of around $1.11 million. This investor had accumulated 17,770 ETH between 2017 and 2020 at an average price of $182 per ETH and previously sold at $3,503 in March 2024, realizing a substantial profit of approximately $59 million.

ETH/BTC Pair Needs to Turn Bullish

Despite Ethereum’s approach to the $4,000 mark, it still needs to breach this level to confirm bullish momentum. Analyst Tuur Demeester pointed out in a May 25 post on X that the ETH/BTC pair has yet to show market euphoria. He noted that the pair needs to breach 0.06 to turn bullish. At publication, ETH/BTC was trading at 0.056, with the 50-week simple moving average (SMA) providing immediate support.

For a stronger bullish signal, the pair must maintain this support level and confront resistance at 0.06, marked by the 200-week SMA. However, breaching this level doesn’t guarantee a sustained uptrend. The pair will need to flip the 100-week SMA at 0.063 to confirm the breakout.

Conclusion

With exchange deposits reaching record highs and some investors cashing in on their holdings, Ethereum might face selling pressure soon. While the ETH/BTC pair shows potential for a bullish turn, critical resistance levels must be overcome to confirm a lasting upward trend.