Ethereum Bulls Diverge as Whales Accumulate, Traders Take Profits

Ethereum's latest market dynamics have sparked optimism about the potential recovery of ETH's price. A significant bullish divergence, indicated by the taker buy-sell ratio against the price trend, suggests a possible end to the bearish trend and the start of a bullish one. Historically, such divergences have preceded market recoveries, as seen in September 2023 and November 2024 to January 2025.

However, the Cumulative Volume Delta (CVD) reveals that smart DEX traders have been taking profits or closing their positions, indicating a possible sentiment shift or risk aversion at current price levels. This selling activity could create short-term price volatility or pressure, contrasting with the whales' accumulating behavior. The complex interplay between these two groups could lead to divergent short-term and long-term impacts on Ethereum's trajectory.

At the time of writing, Ethereum was trading in the oversold zone, historically a potential reversal point on the charts. ETH's price seemed to be trading below this critical threshold within the log curve zones, increasing the likelihood of a price bounce. Historically, such positioning has preluded major rebounds, like in mid-2017 and late 2020. However, external market shocks or broader bearish sentiment could override this potential, pushing ETH further down before any major recovery occurs. The prevailing oversold status could catalyze a bullish reversal or trigger a longer downtrend.