Ethereum’s Rally Stalls Below $2,000 as On-Chain Activity Falters
Ethereum’s attempt to reclaim the $2,000 threshold faltered this week with ETH-USD peaking at $1,957 before succumbing to profit-taking. After recovering from its April trough of $1,453, the token has been range-bound between $1,756 and $1,833 since April 23. Daily volume remains elevated at $16 billion, signaling strong interest, yet buyers have failed to sustain momentum. The price–Daily Active Addresses divergence turning negative at –51% highlights dwindling user engagement, a red flag given that a healthy rally needs on-chain participation to back it up.
Heavy Resistance Looms Between $2,066 and $2,517
IntoTheBlock’s Global In/Out of the Money data shows that over 69 million ETH purchased between $2,066 and $2,517 now sit underwater. Those holders cumulatively control more than 12 million addresses. Should ETH-USD challenge this zone again, a wave of break-even selling could push the price back toward critical support at $1,578. That level corresponds with the 61.8% retracement of the March–April advance and coincides with the descending trendline that capped rallies earlier this cycle.
Chaikin Money Flow Warns of Fading Buy Pressure
On the daily chart the Chaikin Money Flow reading has slipped from 0.16 to 0.04 in recent sessions, pointing to weakening accumulation by large traders. The 50-day Exponential Moving Average holds at $1,800 but the 100- and 200-day EMAs at $2,148 and $2,469 respectively remain well above current levels. Until ETH-USD decisively breaks and closes above the 100-day EMA, the path of least resistance favors downward probes to test the multi-month support zone between $1,500 and $1,600.
Derivatives and ETF Flows Paint Cautious Picture
Open interest across Ethereum futures has climbed by $3 billion since early April, yet the long-to-short ratio remains just below parity at 0.97, implying traders are hedging rather than aggressively betting on fresh highs. Institutional demand via spot Ethereum ETFs saw five straight days of inflows until April 30, netting $2.5 billion in the past fortnight. While encouraging, these inflows pale next to Bitcoin’s $10 billion haul, underlining Ethereum’s vulnerability to broader market sentiment shifts.
Whale Movements Signal Short-Term Uncertainty
On May 2 a whale reawakened a three-year-old ICO wallet and moved 3,000 ETH to Kraken—worth $5.53 million—suggesting an intent to sell into strength. Kraken inflows of this magnitude have historically preceded sub-3% corrections within 48 hours. Retail addresses appear unphased for now, but the combination of potential whale sell-pressure and muted on-chain engagement raises the risk of a retest of $1,600 if bulls can’t defend the $1,750 pivot.
Momentum Indicators Point to Consolidation, Not Breakout
The Relative Strength Index hovers at 53—neither overbought nor oversold—and the MACD line has flattened just above its signal line. This coiled action frequently leads to small-range volatility rather than decisive moves. A convincing daily close above $2,028 would target the 38.2% Fib of the March–May decline at $2,426. Conversely, a drop beneath the April 23 low of $1,756 would open the door to the March 31 bottom at $1,453.
Positioning Verdict: Hold Until Clear Trend Emerges
Given the confluence of resistance at $2,066–$2,517, waning on-chain activity, whale inflows to exchanges, and neutral momentum readings, betting on a breakout now carries elevated risk. A patient stance of “hold” seems prudent until Ethereum reestablishes robust daily active addresses above its price or clears $2,150 on heavy volume. Should ETH-USD instead tumble below $1,600, the strategy would shift to “buy the dip” near structural support.
