Ethereum (ETH) Drops 10% Amid Korean Buying Spree

Ethereum (ETH) has recently made a notable surge, breaching the $1900 mark. This price movement has been characterized by significant fluctuations, with the cryptocurrency experiencing both sharp increases and declines. The recent drop to around $1850 represents a nearly 10% decrease over the past 24 hours, highlighting the volatile nature of the market.

The volatility in ETH's price can be attributed to several factors, including a sharp decline in exchange reserves coupled with a surge in accumulation, particularly driven by Korean traders. This accumulation trend suggests that investors are strategically buying ETH, viewing the current price levels as a discount. Data indicates that demand for ETH has reached a new high over the past week, with a total of 1.8 million ETH purchased and moved into private wallets. This marks the highest net outflow since December 2022, typically associated with rising demand for ETH.

Korean investors appear to be a significant driving force behind the current demand for ETH. The Korean Premium Index, which measures the premium of ETH on Korean exchanges compared to other global exchanges, has been rising. The index currently stands at 3.2, well above the selling level below 0, indicating more buying activity on Korean exchanges. This trend is further supported by a broader outlook on global positioning in the derivatives market, which shows an increase in long contracts, suggesting that traders are betting on a price rally. The Taker Buy/Sell Ratio has also moved into the buying zone for the first time since March 3, currently at 1.019, reinforcing confidence in the market as both spot and derivative traders align in accumulating the asset.

Technical analysis suggests that ETH is currently trading within a bullish pattern marked by descending trendlines and Fibonacci levels. Historically, ETH has attempted to break out from this level on two occasions, both resulting in failed attempts. However, the confluence of spot and derivative market activity this time around could provide the necessary catalysts for a successful breakout. With ETH trading off a support level at $1,988.30, the outcome of this rally could push the price toward $2,635. Given the lack of major resistance ahead, ETH could see a significant jump to $2,900, surpassing a key liquidity cluster. During this rally, ETH may experience slight pullbacks